An EIN number is a unique nine-digit number assigned by the Internal Revenue Service (IRS) in the following format: XX-XXXXXXX.  The taxpayer identification number is issued to businesses as well as other entities operating in the United States (and in some cases abroad in foreign countries) for the purposes of identification.  When the IRS EIN number is used for identification purposes, it is usually referred to as a Taxpayer Identification Number (TIN).  When the IRS EIN number is used for the purposes of reporting employment taxes, it is usually referred to as an Employer Identification Number (EIN).

You will need to apply for a Federal Employer Identification Number (FEIN) if you: (1) hire employees, (2) operate your business as a corporation, multi-member LLC, non-profit organization or partnership, (3) file an alcohol, tobacco and firearms tax return, employment tax return or excise tax return, (4) withhold taxes on income for domestic individuals, (5) have a Keogh plan (which is a tax deferred retirement plan for the self-employed), or (6) are involved with an estate, farmers' cooperative, real estate mortgage investment conduit, plan administrator or trust.

If you already have a federal tax ID number issued, but the business entity or ownership of the business changes, you may need to complete another tax ID number application.  A few examples of when you will need to obtain a new federal tax ID include: (1) when you change business structures (such as changing from a sole proprietorship to a corporation, or changing from a partnership to a corporation), (2) when you terminate your partnership and form a brand new partnership, (3) when you purchase or inherit an existing business, (4) when the Secretary of State issues a new charter to your corporation, (5) when your corporation becomes a subsidiary of another corporation, or (6) when you declare bankruptcy as a sole proprietor.

An IRS EIN is required in order to conduct many business activities.  The most basic business activities requiring a TIN number include: filing a business tax return with the IRS, filing for government licenses or other business permits, hiring employees, getting paid from vendors for goods or services provided, opening a business bank account or merchant account to collect credit card payments, and obtaining a business loan or business credit card.  As you can see, it's virtually impossible to conduct any sort of business in the United States without getting an EIN number first.

All US citizens and residents with a Social Security Number (SSN) must supply their SSN during the online EIN application process.  International applicants with an Individual Taxpayer Identification Number (ITIN) must supply the ITIN during the EIN tax ID number application.  Foreign applicants without a previously issued ITIN don't need to fret.  We can aid those individuals to obtain the EIN number without acquiring the ITIN first, saving both time and money.  The process to obtain an ITIN takes a minimum of 8 to 12 weeks.  The ITIN is notoriously hard to obtain requiring many specific documents to be provided to the IRS before the tax ID number is issued.

Sole proprietors operating with their Social Security Number (SSN) may wish to get an EIN number for the purposes of opening a bank account.  With a bank account under the business name, it helps to keep business expenses and personal expenses separate.  Certain entities, such as a church youth organization, may never need to hire any employees or file any IRS tax returns, but may benefit from having a bank account just for the organization to organize events and manage expenses.  International businesses may also wish to obtain an IRS tax ID number solely for the purposes of opening a business bank account in the United States.

If the legal entity is either a corporation or a limited liability company (LLC), you will first need to register the business with the relevant State to ensure the legal entity name is approved.  For corporations, you must first obtain a Certificate Of Incorporation.  For limited liability companies (LLCs), you must first obtain the Articles Of Organization.  This requirement is not necessary for all other entity types.  When you are ready to complete the online EIN registration, there are 4 simple steps:  (1) select the correct EIN application for your entity type, (2) correctly complete and sign your tax ID number application online, (3) pay the correct EIN application fee, and (4) receive your IRS EIN over email and mail.

US applicants with a SSN and a US-organized entity generally receive their federal tax ID number within 1 business day by email.  Clients who complete the tax ID number application before 7pm PST generally receive their IRS EIN number within the same business day. EIN applications sent to us after 7pm PST are processed on the next business day.  The IRS will mail the official EIN notification letter to the EIN applicant within 2 to 3 weeks.  Foreign applicants with or without an ITIN and a US or foreign organized entity generally receive their federal tax ID by email within 4 to 7 business days.  The IRS will mail the official EIN notification letter to the international EIN applicant within 3 to 4 weeks.  Depending on the IRS' workload, their processing time for international EIN applications can vary.  We make our best effort to submit your international EIN tax ID form to the IRS within 1 business day for processing.  Please note: If there are any mistakes in your EIN application, it may delay the estimated processing times.

If you are operating as a sole proprietor, the IRS can only issue 1 federal tax ID number to you.  Whether you own 1 business or 10 businesses as a sole proprietor, you will use the same EIN number.  However, if you also own a corporation or a LLC, then you are able to obtain a taxpayer identification number for the corporation or LLC as its considered a separate entity from yourself.  It's important to note that the IRS can only issue 1 employer identification number to a specific responsible party per day.  Thus, a client submitting EIN applications for different entities (i.e., multiple trusts) within the same day will need to wait longer for the IRS to issue the multiple EINs.

Yes, you can use the IRS issued EIN number right away.  You may wish to use the tax identification number to open a bank account, apply for a business license, file a tax return by mail, etc.  Please note that it will take approximately 2 weeks for the IRS to update all of its databases with the newly issued federal tax ID number.  Thus, you will need to wait a little while if you are trying to file an electronic tax return, make an e-payment, or pass an IRS Taxpayer Identification Number (TIN) matching program.