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The Ultimate Guide to Employer Identification Numbers (EINs)

Opening or growing a business in the United States offers exciting opportunities. To fully capitalize on these prospects, it’s important to understand the numerous elements required to set up your U.S.-based business to comply with the Internal Revenue Service from the outset.

A critical step in establishing and expanding your business in the U.S. involves applying for an Employer Identification Number (EIN). This guide will delve into the meaning of EIN, highlighting its role as distinct from other U.S. taxpayer identification numbers. We’ll explore the various business entities, including LLCs requiring an EIN, the process to apply for and obtain an LLC EIN number, and the associated EIN number cost.

Additionally, we will cover specific scenarios, such as applying for an EIN for foreign-owned businesses or nonprofits. Keep reading to learn all the necessary information to successfully apply for and obtain an EIN for your company. If you have more questions or would like personalized assistance in your EIN application process, we're here to help.

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What is an Employer Identification Number (EIN)?

An EIN, or Employer Identification Number, is a 9-digit number assigned and used by the IRS as a unique way to identify your business. Your EIN is the master key for completing any tax-related activity. Some of the activities that the IRS attaches to your EIN include:

  • Having employees
  • Business structures such as partnerships, corporations, limited liability companies (LLCs), and more
  • Filing tax returns on employment, excise, alcohol, tobacco, and firearms
  • Withholding taxes on income paid to non-resident aliens
  • Being involved in specific types of activities like Keogh plans, trusts, estates, nonprofits, and farmers’ cooperatives

Think of your EIN, like your company’s Social Security number (SSN). An SSN identifies an individual for many personal purposes, including taxpayer identification, securing employment, income reporting, collecting government benefits, and record-keeping.

An EIN, on the other hand, identifies a company for business tax purposes. That means your EIN will be attached to every action with a tax implication for your business, ensuring that your company and the IRS can be on the same page regarding tax time.

With the introduction of the Corporate Transparency Act (CTA) and the mandatory Beneficial Ownership Information (BOI) filing requirements, having an EIN has become indispensable for all businesses to maintain compliance. Additionally, an EIN is crucial for business banking, as it is often required to open bank accounts and secure financing.

The process of obtaining an EIN is free through the IRS, but it can be intricate and time-consuming. Legal support, such as from providers like LLC Attorney, can streamline this process, allowing you to focus on growing your business rather than navigating bureaucratic complexities. Consider the future growth trajectory of your business and consult legal advice early on to determine the optimal timing for applying for your EIN.

Understanding SSN, ITIN, and EIN

When setting up or managing your business in the United States, it's crucial to understand the different identification numbers used by the government for individuals and businesses:

  • Social Security Number (SSN): Issued by the Social Security Administration, an SSN is a unique 9-digit number assigned to U.S. citizens, permanent residents, and certain temporary residents. The primary purpose of an SSN is to track individuals' earnings for Social Security benefits and for individual tax purposes.
  • Individual Taxpayer Identification Number (ITIN): This is a tax processing number issued by the IRS to individuals who are required to have a U.S. taxpayer identification number but do not qualify for an SSN. ITINs are used by the IRS to manage tax laws and are issued regardless of immigration status.
  • Employer Identification Number (EIN): Also known as a Federal Tax Identification Number, the EIN is issued by the IRS and used primarily to identify a business entity. It's necessary for a variety of business activities, such as opening bank accounts, hiring employees, and filing business tax returns. Unlike SSNs and ITINs which are for individuals, an EIN is specific to business entities.

Key Uses of an EIN Include:

  • Hiring employees
  • Opening business bank accounts
  • Filing for CTA and BOI
  • Filing tax returns for employment, excise, and alcohol, tobacco, and firearms
  • Withholding taxes on income, other than wages, paid to a non-resident alien
  • Handling Keogh plans or other types of retirement plans

Obtaining an EIN is a critical step for ensuring compliance with IRS requirements and facilitating various business operations effectively. It is important for all business entities, from sole proprietorships to large corporations, to have their EIN to meet federal tax obligations and establish credibility as a legitimate business operation.

Application Process: Businesses can apply for an EIN online, via mail, fax, or by phone if international without an ITIN. The online application process is generally quickest.

What are the Federal Legal Requirements for Obtaining an EIN?

To obtain an Employer Identification Number (EIN), your business must be located within the United States, and the applicant is required to have either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). If you do not have an SSN or ITIN, you can still apply for an EIN by faxing or mailing your application.

If the applicant lacks an SSN, they should initiate the ITIN application process by submitting Form W-7 to the IRS. Importantly, there are no size restrictions for businesses applying for an EIN — entities ranging from sole proprietorships with a single employee to large corporations are eligible and can benefit from obtaining an EIN.

Who Needs an EIN?

An Employer Identification Number (EIN) is essential for every LLC due to the Corporate Transparency Act (CTA), which mandates its use for various business functions and compliance. Here’s a breakdown of the types of businesses that require an EIN and why:

Common business types that require EINs

  • Corporations: All corporations require an EIN as they are distinct legal entities. If your corporation undergoes significant changes such as a name change, structural transition, or becomes a subsidiary, it may need to apply for a new EIN.
  • Partnerships: Any business partnership requires an EIN. If a partnership restructures, dissolves, or one partner takes full control and transitions to a sole proprietorship, a new EIN is necessary.
  • Limited Liability Companies (LLCs): Due to the CTA, all LLCs require an EIN, regardless of their size or if they employ others. This simplifies tax filing and compliance across single-member and multi-member LLCs, which can be treated as partnerships or corporations for tax purposes.
  • Employee Benefit Plans: All types of employee benefit plans, including Keogh plans, Solo 401(k) plans, and SEP IRAs, require an EIN to manage and report their activities properly.
  • Personal Service Corporations: Businesses providing personal services such as consulting, engineering, or legal advice need an EIN for tax and reporting purposes.
  • Real Estate Mortgage Investment Conduits (REMICs): As entities often structured like partnerships, REMICs must obtain an EIN for tax filings and compliance.

Obtaining an EIN validates your business's financial operations, enhances credibility, and meets federal financial and tax reporting requirements. Every company that meets these conditions should consider applying for an EIN promptly to ensure compliance and facilitate business transactions.

Decision-making guide on whether your business needs an EIN

Determining whether or not your business requires a unique EIN can feel like a daunting task. If you answer yes to any of these questions, your business requires an EIN:

I have a corporation
My is corporation changing its name
My corporation is becoming a subsidiary of another corporation
My business is changing structure from incorporated to a sole proprietorship or partnership
My corporation is forming a new corporate charter
My business is a partnership with two or more partners
One partner in my business taking over the business and becoming a sole proprietorship
My partnership is planning to incorporate
I am dissolving an existing partnership and forming a new one
I have a nonprofit organization
I employ someone to help in my home
I am acting as an agent for a household employer
I am filing for Chapter 7 or Chapter 11 bankruptcy under the Bankruptcy Code
I have a real estate mortgage investment conduit (REMIC)
My business will need to open financial accounts

While these are many of the ways you can determine whether your business requires an EIN, there can be other additional reasons or benefits for obtaining an EIN. Special cases also require EINs, which are not traditional business structures. We will discuss those in a moment.

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Mandatory EIN Requirements for Businesses

Now that you know whether or not your business requires an EIN, what does the EIN application process require?

First, gathering all the necessary information is essential to make the process go smoothly.

To qualify for an EIN application, you must first be able to say ‘YES” to the following criteria:

Remember, a business must re-apply for a new EIN whenever its structure changes. That

Application Process:

  • Online: If applying online, you do not need to submit IRS Form SS-4 — however, you must have an SSN or TIN.
  • Fax/Mail: If you do not have an SSN or TIN, you can still apply by faxing or mailing in Form SS-4 to the IRS.

Reapplying for an EIN:

Whenever a business undergoes a significant structural change, such as transitioning from a sole proprietorship to a corporation, it must reapply for a new EIN. This also applies if a corporation or LLC restructures.

There are other specific conditions outside typical business types that may necessitate an EIN. These scenarios ensure that all pertinent financial activities are appropriately tracked and reported to the IRS.

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Unique Situations Requiring an EIN

  • Sole proprietorships: While many sole proprietors operate without an EIN, obtaining one can help separate personal and business finances, establish business credit, and enhance your business’s credibility.
  • Trusts: EINs are necessary for managing trusts such as Ginnie Mae (GNMA) pools, Fannie Mae (FNMA) pools, and other fiduciary operations, especially as these trusts are treated as separate legal entities once funded.
  • Estates: When managing the distribution of assets from a deceased person’s estate, an EIN is required to handle the estate’s financial responsibilities effectively.
  • Tax-exempt organizations: Prior to applying for 501(c)(3) tax-exempt status, it is mandatory for nonprofit organizations to obtain an EIN. This aids in IRS identification and compliance.
  • Household employers and their agents: Household employers, or their agents, must obtain an EIN to manage payroll tax withholding and other employment-related filings.
  • Individual bankruptcy: Filing for Chapter 7 or Chapter 11 bankruptcy necessitates an EIN for the bankruptcy estate, treating it as a separate taxable entity. This applies even if married spouses file jointly.

Step-by-Step Guide to Obtaining an EIN

Here’s what you'll need to get started:

Submission Options:

  • Online: The fastest method, typically processing your application instantly.
  • Fax: It takes about four business days to receive your EIN once faxed.
  • Mail: Expect up to four weeks for processing, provided all information is correct.
  • International Applicants: Must apply by fax or mail if outside the U.S. without an ITIN.
  • For international applicants with an ITIN and a physical presence in the U.S.: You are eligible to apply online, simplifying the process and providing immediate results.

Troubleshooting the Application Process

There are some common issues when applying for an EIN. Here are some of the pitfalls we see most often, and how to solve them.

  1. Incorrect, incomplete, or illegible information: Ensure all details are correct to avoid processing delays and rejections.
  2. Applying for multiple EINs: Submitting multiple applications for the same entity can cause confusion and delays. Ensure you need an EIN before applying.
  3. Using the wrong application form: Always use the correct IRS form (SS-4) to avoid complications.
  4. Not understanding the EIN application process: If unclear about the process, review the IRS guidelines carefully or ask for assistance from the team at LLC Attorney.
  5. Applying for an EIN when you don’t need to: This can complicate the process for everyone involved. To avoid unnecessary confusion and delays, carefully determine if your business actually needs an EIN. Consult the Decision-Making section of this guide to verify whether an EIN is necessary for your specific business activities before applying.
  6. Not knowing if you require a state-level TIN: Some states may require that a business file for a state-level Tax Identification Number. It’s also important to see if you need a TIN in addition to an EIN.

Legal and IRS Penalties for Not Obtaining an EIN

Operating a business without an EIN when one is required can lead to significant legal and financial repercussions. Here are specific penalties that businesses may face:

  • Failure to File Penalties: Businesses that don’t obtain an EIN to file required tax returns. This can lead to the 'failure to file' penalties, which can be up to 25% of the tax due.
  • Withholding Errors: If you have employees and fail to obtain an EIN, you will be unable to properly report and withhold income and payroll taxes, which could result in penalties equal to the amount of taxes that should have been withheld.
  • Inability to Open Business Accounts: Most financial institutions require an EIN to open business banking accounts. Without an EIN, you're unable to establish legitimate business credit, which can hinder financial operations and growth.
  • Grant and Loan Rejections: Many government and private funding opportunities require an EIN to apply. Without it, your business may miss out on essential funding.

Annual Obligations and Reporting Requirements

Once you have obtained an EIN, there are annual obligations and reporting requirements to keep your business in good standing:

  • Annual Tax Returns: Regardless of business type, all businesses must file annual tax returns. Your EIN is required on all forms, and failing to report can lead to penalties and audits.
  • Updating Business Information: If your business undergoes significant changes (e.g., change in address, ownership, or business structure), you must inform the IRS. This is done by filing Form 8822-B to update your EIN records.
  • Employment Tax Reports: Businesses with employees must file regular employment tax reports using their EIN. This includes quarterly filings of Form 941 or annual filings of Form 944, depending on the business size.
  • Information Returns: Businesses might need to file information returns such as Forms 1099 or W-2 under their EIN, which report payments to independent contractors and wages to employees, respectively.

Tips for International Applicants

International applicants have specific procedures to follow when applying for an EIN, depending on their documentation and presence in the U.S.:

  • Without an ITIN or U.S. Presence: If you do not have an Individual Taxpayer Identification Number (ITIN) and are not physically present in the U.S., you must apply for an EIN via faxor mail. This method accommodates those who do not have the necessary U.S. documentation but need an EIN for business operations related to their U.S.-based business activities.
  • With an ITIN and U.S. Presence: International applicants who have an ITIN can apply for an EIN online, provided the business entity they are registering has a physical presence in the United States. This requirement ensures that the entity is actively engaged in operations within the U.S., facilitating a smoother process for international business owners to manage their U.S.-based activities.

Key Requirements for All International Applicants:

  • Business Presence Required: Your company must conduct or intend to conduct business within the United States to qualify for an EIN.
  • Wait for Business Approval: If registering a new business such as a corporation or LLC, wait for state approval before applying for your EIN.
  • Form SS-4 Requirements: Complete IRS Form SS-4, ensuring all required information about your business operations and the responsible party is accurately filled. Non-resident applicants should mark section 7b with "Foreign US" if they do not have an SSN.
  • Include Necessary Documents: Submit your Certificate of Incorporation or Articles of Organization along with your Form SS-4 to ensure the IRS processes your application efficiently.
  • Application Review: Ensure all submitted materials are complete and legible to avoid delays or rejections. If rejected, you must restart the application process.
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Tips for Applicants Without a Social Security Number

If you need to comply with U.S. business regulations but do not have an SSN, you can apply for an Individual Taxpayer Identification Number (ITIN) using IRS Form W-7. This applies to U.S. residents and nonresident aliens needing a taxpayer identification number.

An SSN or ITIN is only necessary for EIN applications if applying online. Applications submitted by fax or mail only require completing Form SS-4 and providing the necessary documents.

Beyond Taxation: How an EIN Benefits Your Business

While an EIN is necessary for IRS tax filing purposes, many other daily and common business activities are made easier when your business has an EIN.

Some of the daily benefits of having an EIN include:

  • Avoiding identity theft: Using an EIN instead of your SSN for business transactions helps protect your personal information from theft.
  • Applying for a business license: Many states require an EIN to issue business licenses.
  • Filing a Beneficial Ownership Information Report (BOIR): A requirement of the U.S. federal government, a business must file a Beneficial Ownership Information Report (BOIR), which also requires an EIN.
  • Obtain business bank accounts and loans: Banks generally require an EIN to open business accounts and process loans, which are crucial for business operations and growth.
  • Employee management: An EIN is necessary for setting up payroll systems and filing employment-related tax documents.
  • File your taxes: If you file taxes without an EIN when your business is required to have one, you could face several tax penalties.
  • Build business credibility: Having an EIN demonstrates your business’s legitimacy to vendors, partners, and lenders.

Proactive Reasons to Obtain an EIN

Obtaining an EIN is essential for compliance and offers several strategic advantages for managing and growing your business:

  1. If you anticipate hiring employees in the future, having an EIN is necessary for handling payroll and tax reporting.
  2. An EIN is crucial for separating personal and business finances. It simplifies the process of opening business bank accounts, which is essential for clear financial tracking and enhances personal information security.
  3. An EIN helps establish your business as a legal entity, which can improve your ability to obtain business credit and build credibility with lenders, vendors, and customers.
  4. Many lenders require an EIN and view it more favorably than a SSN for financial transactions and loan applications.
  5. For owners of single-member LLCs, an EIN can help reinforce the separation between personal and business liabilities, offering an added layer of protection.

Additionally, under the Corporate Transparency Act (CTA) and Beneficial Ownership Information (BOI) regulations, newly formed entities are required to file an EIN within 90 days of formation. This filing is integral to maintaining compliance with U.S. federal regulations.

Protecting Personal Information with an EIN

As mentioned above, an EIN instead of an SSN can help keep your personal identity safe. Because an EIN creates a separate tax entity for your business, your taxes, and government filings will be completely independent from your company's. Doing so means protecting yourself and your assets from business implications such as losses.

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The benefits of having an EIN can go far beyond just taxation benefits. They can be a key factor in your ability to engage in many common business activities.

Updating and Maintaining Your EIN

Once you have an EIN, it’s important to keep the IRS informed about significant changes to your business, such as structural or ownership shifts, which may necessitate a new EIN. Regular updates include:

  • Operational Changes: Notify the IRS if there are changes in your business address, name, or responsible party using Form 8822-B.
  • Significant Structural Changes: Major changes like mergers, restructuring, or changes in ownership structure may require applying for a new EIN.

What kind of changes to my business require a new EIN?

When your business structure changes, you must file for a new EIN, which often means filing new IRS forms.

These changes can include:

Sole Proprietorships:

  • You are filing for bankruptcy
  • You choose to incorporate, changing your business structure to a corporation
  • You bring in partners, changing your business structure to a partnership
  • You buy or inherit an existing business that you will now operate as a sole proprietorship

Corporations:

  • The business receives a new charter from the secretary of state
  • As a subsidiary of a corporation, you’ve been using the parent's EIN
  • The business becomes a subsidiary of a corporation
  • The business structure changes to a partnership or a sole proprietorship
  • The business is part of a statutory merger and creates a new corporation
  • The corporation wants to be taxed as an S corporation (you must also file Form 2553)

Partnerships:

  • The business chooses to incorporate and changes to a corporate business structure
  • One partner assumes the business and becomes a sole proprietorship
  • The business dissolves its current partnership and forms a new one

Single-member LLCs with employees

The following conditions would require a new EIN if they are created under state law:

  • A new Multi Member LLC is created
  • A new Single Member LLC is created, and
    • Wants to be taxed as a corporation or an S corporation (you must also file IRS Form 8832)
    • Is required to file excise taxes for tax periods beginning on or after January 1, 2008
    • Is required to file employment taxes for wages paid on or after January 1, 2009

Businesses must report any changes to the responsible party to the IRS within 60 days by using Form 8822-B - Change of Address or Responsible party. That form is also used to report any changes in the business mailing address or business location.

How to Handle Changes That Require a New EIN

If your business undergoes significant changes, such as a change in ownership structure, name, or type of organization, it may be necessary to apply for a new EIN. To facilitate these changes, you must complete specific IRS forms:

  • Form 8822-B: Use this form to report a change in address or the identity of your business’s responsible party. It's essential to submit this form within 60 days of the change.
  • Form SS-4: If applying for a new EIN due to structural changes, this form must be submitted. Detailed instructions are provided to ensure that all required information is accurately captured.
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When and How to Close an EIN

While the IRS does not cancel EINs, you can close your business account associated with the EIN if your business ceases operations or after completing the administration of an estate or trust. Here’s how:

  • Necessity: If your business ceases operations or after the administration of an estate or trust.
  • Process: Send a letter to the IRS including your business's legal name, address, EIN, the reason for closing the account, and a copy of the EIN assignment letter if available.
  • Addresses: Mail to Internal Revenue Service — address depending on state of formation.

Special Considerations for Nonprofits, Tax-exempt Organizations, S Corps, and LLCs

Understanding the unique considerations and regulatory requirements for nonprofits, tax-exempt organizations, S Corps, and LLCs is imperative, highlighting the essential steps to ensure compliance and operational success.

EIN for Nonprofits and Tax-exempt Organizations

Creating a nonprofit organization and incorporating it in your state forms the legal foundation, but further steps are required to benefit from tax exemption.

First, the organization must be incorporated and obtain an EIN. Then, it must apply for tax-exempt status under IRS section 501(c)(3), which is applicable to public charities and private foundations.

Types of tax-exempt status for nonprofits

  • 501(c)(3) Organizations: This is the most common tax-exempt status, designated for public charities or private foundations. It covers a wide range of causes including religious, educational, charitable, scientific, literary, public safety, amateur sports, and prevention of cruelty to animals and children. Donations to these organizations are typically tax-deductible.
  • 501(c)(4) Organizations: These are social welfare organizations that may lobby for political or legislative changes. Contributions to 501(c)(4) organizations are not tax-deductible as charitable donations.
  • 501(c)(5) Organizations: This status applies to labor, agricultural, or horticultural organizations. These groups use their status to promote the interests of their members.
  • 501(c)(6) Organizations: Business leagues, chambers of commerce, real estate boards, and professional football leagues (which do not qualify as 501(c)(3) organizations) fall under this category. They are aimed at improving business conditions.
  • 501(c)(7) Organizations: These are social and recreational clubs that promote fellowship and recreational activities among members. Contributions are not tax-deductible.
  • 501(c)(19) Organizations: This designation is for veterans' organizations that have at least 75% war veteran membership.
  • 501(c)(27) Organizations: Qualified state-sponsored workers' compensation reinsurance organizations fall under this category.

What are the benefits of having tax-exempt status?

Having tax-exempt status means that the organization's net profits are exempt from federal income taxes, but there are several other benefits to having tax-exempt status.

  • Exemption from federal income taxes
  • Potential for state-level tax exemptions
  • Ability to receive tax-deductible donations if under 501(c)(3)
  • Eligibility for certain grants and public allocations
  • Possible exemptions from state and local sales and property taxes
  • Increased credibility and potential postal rate discounts

How does having an EIN help my nonprofit gain tax-exempt status?

Regardless of the type of tax exemption your organization qualifies for, one of the requirements is that it must have an EIN.

So, what other steps and requirements are necessary for a nonprofit organization to qualify for tax-exempt status?

Step 1: Incorporate your nonprofit in your chosen home state. You will need your Articles of Incorporation when you apply for tax-exempt status.

Step 2: Apply for an EIN by filing a Form SS-4 with the IRS

Step 3: Include a detailed explanation of your business purpose (what your nonprofit has been created to accomplish) in your Articles of Incorporation.

Step 4: If you’re applying for 501(c)(3) tax-exempt status, file IRS Form 1023. Smaller nonprofit organizations could be eligible to file Form 1023-EZ. Note: here is an application fee of $600 for filing Form 1023 and $275 for filing Form 1023-EZ.

Step 5: Allow up to a year for the IRS to process your application, depending on how many follow-up questions the IRS may have for you.

Step 6: File your application by the end of the 27th month after incorporation in order to benefit from being recognized as tax-exempt from the date of your organization’s creation. Waiting to file after the 27th-month deadline will result in the organization only being recognized as tax-exempt from the date of the application, which means you could miss out on some benefits of your status.

Step 7: Complete your state-level application. While many states do not offer separate, state-level tax exemptions, those that do have a specific form that is required to obtain state-level exemptions for nonprofits.

Unique EIN Considerations for Different Business Structures

When choosing your business structure and applying for an EIN, consider the unique tax implications. S corporations and LLCs, for instance, benefit from pass-through taxation, avoiding the double taxation faced by C corporations. Here’s how to decide the best structure for your needs:

  • S Corporations: Suitable for businesses that prefer a structure with pass-through taxation but without self-employment taxes on dividends.
  • LLCs: Offer flexibility, allowing members to decide if they want to be taxed as a corporation or as a partnership.

Whether you’re a nonprofit seeking tax-exempt status or a commercial enterprise weighing the benefits of different business structures, obtaining an EIN is a crucial step. It aligns your business with IRS requirements and supports various operational needs from payroll processing to opening bank accounts.

So, which would be a more suitable structure for your business?

S Corporations

  • Incorporation fees range from $100 to $250
  • Perfect for complex companies that need a structured and/or hierarchical approach to management
  • Can receive a tax benefit by paying owners a salary, which can result in significant savings
  • S corps have looser tax and filing requirements
  • S corps are not required to pay corporate income tax
  • All profits pass through the company

LLCs and Corporations

  • Formation fees range from free to $500
  • Often most appropriate for sole proprietors or smaller businesses
  • Non-S corp LLCs are subject to 15.3% self-employment taxes against entire income on all net profits. Please note that non-managing members do not pay self-employment tax.
  • Taxation mimics sole proprietorships for Single-Member LLCs and partnerships for Multi-Member LLCs, respectively
  • Can choose to be taxed as either C or S corporations (as long as they are eligible)
  • C corps are required to pay taxes quarterly
  • C corp owners are required to pay annual income tax on their share of company profits

There are many special cases that could require you to have an EIN. Formations of LLCs, S Corps, and even estate management could be subject to requiring an EIN.

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Troubleshooting Common EIN Issues

Managing your Employer Identification Number (EIN) correctly is crucial for your business's compliance with IRS regulations. Here are some common issues related to EIN misuse and incorrect filings, along with tips on how to address them:

  • Misuse of EIN: If you discover that your EIN is being used fraudulently, for example, to open unauthorized bank accounts or conduct illegal activities under your business name, immediately report the issue to the IRS. This will help prevent potential tax fraud and related legal issues.
  • Incorrect EIN on Filed Documents: Mistakes can happen when filing tax documents. If an incorrect EIN was used, it’s essential to correct the filing as soon as possible. Amend the return using the correct EIN and inform any institutions that might have received incorrect information.
  • Receiving IRS Notices for Unknown Transactions: If you receive notices from the IRS about transactions you did not conduct, contact the IRS immediately to clarify and rectify the situation. This could be a sign of identity theft or misuse of your EIN.

To protect your business and ensure it complies with regulations, actively monitor your business credit report for any suspicious activities. Keep all business documentation secure and restrict access to your EIN.

If you discover your business has been operating without an EIN, immediately apply for one and consult a tax professional to resolve any back taxes or penalties. If you've accrued significant penalties, proactively contact the IRS to arrange a payment plan. This approach will help mitigate any financial impacts and maintain your business's compliance.

Get Your EIN Now

Obtaining an Employer Identification Number (EIN) is essential for nearly every business operating in the United States, regardless of the business structure. An EIN ensures that the IRS can accurately track your business's tax-related activities and facilitates critical operations such as opening bank accounts, securing loans, and managing payroll.

This unique identifier remains with your business throughout its lifecycle, anchoring your entity’s compliance with federal regulations. While the process to apply for an EIN is straightforward, it can present challenges. If you need guidance or any complexities arise during your EIN application, LLC Attorney is ready to assist. Equip your business with the tools it needs for success — start your EIN application today.

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IRS Resources and EIN Application Forms

Get your Employer Identification Number faster with these quick links to the IRS resources and application forms your business will most likely need.

IRS Form SS-4: The IRS application form required for applying for an Employer Identification Number

Form W-7: The IRS application form required for applying for an Individual Taxpayer Identification Number (ITIN)

IRS Form 1023: The IRS application form required to apply for 501(c)(3) tax-exempt status

Instructions for Form 1023

IRS Form 1023-EZ: The IRS application form required to apply for 501(c)(3) tax-exempt status for smaller nonprofits.

Instructions for Form 1023-EZ

FAQs

An Employer Identification Number, or EIN, is a unique 9-digit number provided by the IRS to identify businesses as unique entities in the United States, mainly for tax reporting purposes.

'EIN' stands for Employer Identification Number. The EIN meaning revolves around its role as a unique identifier for businesses in interactions with the IRS. This ensures clear communication between you, your authorized business representatives, and the IRS concerning taxation matters. Additionally, obtaining an EIN establishes your venture as a formal business entity, enabling it to undertake various common business activities.

An EIN is a 9-digit identification number the IRS provides in the following format: XX-XXXXXXX.

No, an SSN and EIN serve different purposes. An SSN (Social Security Number) identifies individuals for personal tax purposes, whereas an EIN (Employer Identification Number) identifies businesses for business tax purposes.

An EIN is used by the IRS to uniquely identify companies' tax accounts and filings in the United States of America. If you have a business presence or conduct business in the United States, you need an ITIN/EIN in order to comply with IRS tax filing. This way, the IRS can identify corporate taxpayers who are obligated to file various business tax returns. You will also need an ITIN/EIN to engage in typical business transactions such as opening bank accounts, applying for business loans or grants, and opening employee payroll, among other activities.

Yes, Employer Identification Number (EIN) is another name for a tax ID number. An EIN and a tax ID number are the same thing. Once you apply and obtain your EIN, you will use it as your tax ID number for the duration of your business.

Getting an Employer Identification Number is a straightforward, though somewhat lengthy, application process. Please refer to the 'Step-by-Step Guide to Obtaining an EIN' section for instructions, or contact LLC Attorney for personalized, one-on-one support in your application process.

An Employer Identification Number (EIN) and a Federal Employer Identification Number (FEIN) are the same. Your EIN is required for compliance with all tax-related activities, including your business tax account and filing business tax returns. It may also be required by many banks, credit card companies, financial institutions and for working with suppliers and vendors.

For many reasons, your business might require a Federal Tax ID Number or EIN. Please refer to the 'Who Needs an EIN?' section for our helpful decision-making guide to determine whether your business requires an EIN.

Yes, there are several ways to look up a company’s EIN. Ask an Employee: Generally, the fastest way to find a company’s EIN is to contact someone inside the company. Speaking to someone in the payroll department is the most direct way of finding out a company’s EIN. Search an Online Database: Several online databases can help you find a company’s EIN with an EIN lookup. Just make sure you’re searching a website affiliated with the IRS to ensure that the information you find is correct. Check the Securities and Exchange Commission: All publicly traded companies will be listed in the U.S. Securities and Exchange Commission, and yes, their EIN will be listed, too. Try Melissa.com: This handy website functions similarly to the SEC but is designed specifically to research information for nonprofit organizations. EIN Database: If the company you are researching isn’t publicly traded or a nonprofit, you might have luck searching one of the fee-based databases online that let you look up an EIN. Bureau Databases: These databases house credit reports for many businesses. And, of course, where there’s a credit report, there’s a company’s EIN number, as well. ChatGPT: This generative AI platform can pull information from across the internet, including EINs. Be sure to check for accuracy. e AI platform can pull information from across the internet, including EINs. Be sure to check for accuracy. Remember: third-party databases that aren’t affiliated with the IRS website may not always be up-to-date or correct. It’s best to double-check with an IRS-affiliated website to ensure the EIN you’ve found is correct.

If you’ve lost or misplaced your EIN, you can retrieve it in many ways. When you applied for your EIN, the IRS provided you with a computer-generated notice to confirm your application and receipt of an EIN. If you opened a business bank account or applied for a local or state business license of any kind using your EIN account, contact the bank or agency to retrieve your EIN. Have you previously filed tax returns for your existing entity? If so, your old returns will be annotated with your EIN. If you’re authorized to receive it, you can call the IRS Business & Speciality Tax Line and ask the representative to search for and retrieve your EIN. The Business & Specialty Tax Line is 1-800-829-4933 and is open from 7:00 a.m. - 7:00 p.m. local time, Monday through Friday.

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Checklist: Key Actions for Obtaining and Managing Your EIN

To ensure a smooth process for obtaining and managing your Employer Identification Number (EIN), follow this summary checklist of key actions and considerations:

Obtaining Your EIN

  • Determine the Need for an EIN: Assess if your business structure requires an EIN (e.g., if you have employees, operate as a corporation or partnership, etc.).
  • Prepare Necessary Information: Gather all relevant details such as your business name, address, and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) if you are the responsible party.
  • Choose Your Application Method: Apply for your EIN online (the fastest method), by fax or mail if you are an international applicant without an ITIN.
  • Submit Your Application: Complete and submit IRS Form SS-4 (unless filing online) according to the chosen application method.

Managing EIN Changes

  • Monitor for Necessary Updates: Regularly assess if changes in your business (e.g., change in name, ownership, or structure) require a new EIN or updates to the existing one.
  • Submit Required Forms: Use Form 8822-B to report changes in business address or the identity of the responsible party. Use Form SS-4 for applying for a new EIN if major changes occur.
  • Keep Records Updated: Ensure that your EIN records with the IRS and other relevant entities (banks, financial institutions) are current to avoid complications.

Compliance and Troubleshooting

  • Maintain Compliance: Use your EIN for all pertinent business activities such as opening bank accounts, applying for permits, and filing tax returns.
  • Address EIN Issues Promptly: If issues arise (e.g., EIN misuse or IRS record errors), contact the IRS immediately to report and resolve them.
  • Seek Professional Advice: If uncertain about EIN requirements or facing complex issues, consult with a tax professional or legal advisor.

Regular Review

  • Conduct Regular Reviews: Regularly review your business status and EIN applicability to ensure compliance with IRS regulations and to facilitate smooth business operations.

By following this checklist, you can efficiently manage your EIN responsibilities and ensure that your business adheres to necessary federal regulations, ultimately supporting your business’s growth and legal compliance.

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