Application for Tax ID Number: Everything You Need to Know
An application for tax ID number (EIN) is an official request made by a business to be issued a tax identification number by the Internal Revenue Service (IRS).3 min read
2. Applying for an EIN
3. Who can Apply?
4. IRS Permanent Record
5. Lost EIN
6. EIN Replacement
7. Irrevocable and can't be Reassigned
An application for tax ID number is an official request made by a business to be issued a tax identification number by the Internal Revenue Service (IRS). A tax ID number is also called an employer identification number (EIN), and is made of nine digits that are uniquely assigned to each tax-paying business entity in the United States.
The Uses of the EIN
The IRS identifies taxpayers by their federal EINs. Many consider their EIN their business social security number (SSN). The IRS uses the EIN for the following:
- Identification of businesses situated in the United States and its territories
- Identification of businesses for reasons of documenting taxes
- Detection of the companies that tax-paying employees work for
Therefore, it's important for businesses with employees to acquire an EIN. However, whether your business needs an EIN or not depends on the kind of tax return your company files. In fact, some business models need an EIN even without employees. Furthermore, similar to an SSN, an EIN can be assigned to an individual by the IRS, in some cases. Below are some of the circumstances that make it necessary for a legal entity to acquire an EIN:
- A new business
- A need for a business bank account
- A business with employees
- A need to acquire a line of business credit
- A need to file business taxes
- The formation of a corporation, partnership, or an LLC
Applying for an EIN
Applying for an EIN is a simple process that can be done online. However, other options to apply by mail, fax, or telephone are also open. You can take advantage of the safe and simple method of acquiring a new IRS tax ID number online provided by the EIN Filing Service without having to fill complicated and puzzling government forms.
When your application is received, processed, and approved by the IRS, your EIN will be sent through email to enable you to print it and start using it for your various business needs. You'll also be sent a hard copy via regular mail.
There are services that require payment to help you obtain an EIN. However, those aren't necessary because you can easily visit the official IRS.gov website and submit a completed electronic SS-4 form free of charge without any third-party assistance.
When applying for the EIN, you'll be required to supply basic information covering details concerning your company and your business model. You'll also be required to provide your personal information, such as addresses and other details about your business.
Who can Apply?
If you're not doing the application yourself, you'll have to appoint someone to do it for you as your “responsible party.” However, if it's a small business and you're the owner, then, naturally, you'll be the one to apply.
IRS Permanent Record
Your EIN doesn't become an official part of the IRS's permanent record until after a number of weeks. So, if you wish to make a digital payment, pass an IRS taxpayer ID number (TIN) matching program, or file an electronic return, you'll have to hold on until your details are a part of the IRS's record permanently.
The moment you get your EIN number, take time to pen it down. You'll need to keep it handy all through the life of your business. Therefore, it's essential to keep it easily accessible and secured. However, if you lose or forget it, you can dial (800) 829-4933 and choose EIN among the options on the list.
Under some conditions, you can consider replacing your EIN. Such conditions are the kind that affect your business model. For instance, a business can take on a partnership or go bankrupt. Therefore, if your organization is undergoing a change, you should carefully consider whether it needs a new EIN or not, given its circumstances.
Losing your number isn't a good enough reason to apply for a new IRS-issued EIN. You can simply contact the IRS and answer a few basic security questions to verify your ID and retrieve your lost EIN.
Irrevocable and can't be Reassigned
Your EIN, once issued by the IRS, can never be revoked. But if you don't need it anymore, the IRS can terminate your business account, while your EIN remains intact and available in case you ever need it in future. EINs are never reassigned.
If you need help with an application for a tax ID number, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.