Employer ID Numbers (EINs)

What is an EIN?

An Employer Identification Number (EIN) is a nine-digit number that IRS assigns in the following format: XX-XXXXXXX. It is also known as a Federal Tax Identification Number and is used to identify the tax accounts of employers and certain others who have no employees. However, for employee plans, an alpha or the plan number may follow the EIN. The IRS uses the number to identify taxpayers that are required to file various business tax returns. EINs are used by employers, sole proprietors, corporations, partnerships, non-profit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities. Use your EIN on all of the items that you send to the IRS and the Social Security Administration (SSA).

Caution: An EIN is for use in connection with your business activities only. Do not use your EIN in place of your social security number (SSN). 

Due to a high volume of requests for EINs, the IRS will begin limiting the number of EINs assigned per day to a responsible party. Effective April 11, 2011, a responsible party will be limited to five (5) EINs in one business day. This limit is in effect whether you apply online, by phone, fax or mail. 

You should have only one EIN for the same business entity. If you have more than one EIN and are not sure which one to use, call the Business and Specialty Tax Line at 1-800-829-4933 (TTY/TDD users can call 1-800-829-4059). Provide the numbers that you have, the name and address to which each was assigned, and the address of your main place of business. The IRS will tell you which number to use. 

If you do not have your EIN by the time your return is due, write “Applied For” and the date that you applied for it in the space shown for the number. 

Information by Type of Business Entity

1.Sole Proprietorship :

You will need a new EIN if any of the following are true:

• You file bankruptcy under liquidation or reorganization of the Bankruptcy Code

• You incorporate

• You are a sole proprietor and take in partners and operate as a partnership

• You are establishing a pension, profit sharing, or retirement plan 

You do not need a new EIN if any of the   following are true:

• You change the name of your business

• You change your location or add locations (stores, plants, enterprises or branches of the entity)

• You operate multiple businesses (including stores, plants, enterprises or branches of the entity)

Note: If you are a sole proprietor who conducts business as a limited liability company (LLC), you do not need a separate EIN for the LLC, unless you are required to file employment or excise tax returns. A limited liability company is an entity formed under state law by filing articles of organization as an LLC. An LLC owned by one individual is automatically treated as a sole proprietorship for federal income tax purposes (referred to as an entity to be disregarded as separate from its owner). Report the business activities of the LLC on your Form 1040 using a Schedule C, Schedule C-EZ or Schedule F.

2.Corporation :

You will need a new EIN if any of the following are true:

• You are a subsidiary of a corporation and currently use the parent’s corporate EIN

• You become a subsidiary of a corporation

• The corporation becomes a partnership or a sole proprietorship

• You create a new corporation after a statutory merger

• You receive a new corporate charter

You will not need a new EIN if any of the following are true:

• You are a division of a corporation

• After a corporate merger, the surviving corporation uses its existing EIN

• A corporation declares bankruptcy. However, if a liquidating trust is established for a corporation that is in bankruptcy, an EIN for that trust is required. 

• Your business name changes

• You change your location or add locations (stores, plants, enterprises or branches)

• You elect to be taxed as an S Corporation by filing Form 2553

• After a corporate reorganization, you only change identity, form, or place of organization

• The corporation is sold and the assets, liabilities and charters are obtained by the buyer

3.Partnership :

You will need a new EIN if any of the following are true:

• You incorporate

• One partner takes over and operates as a sole proprietorship

• The partnership is terminated (no part of any business, financial operation, or venture of the partnership  ontinues to be carried on by any of its partners in a partnership) and a new partnership is begun.

You do not need a new EIN if any of the following are true:

• The partnership declares bankruptcy. However, if a liquidating trust is established for a partnership that is in  ankruptcy, an EIN for that trust is required.

• The partnership name changes

• The location of the partnership changes or new locations are added.

• The partnership terminates under IRC Section 708(b)(1)(B). A partnership shall be considered terminated if  within a 12-month period there is a sale or exchange of at least 50% of the total interest in partnership capital and profits to another partner. If the purchaser and remaining partners immediately contribute the properties

to a new partnership, they can retain the old partnership EIN. 

4.Estate :

You will need a new EIN if any of the following are true:

• A trust is created with estate funds. Such a trust is not simply a continuation of the estate.

• You represent an estate that operates a business after the owner’s death.

You will not need a new EIN if any of the following are true:

• The administrator, personal representative, or executor changes

• The beneficiaries of an estate change

5.Trust :

You will need a new EIN if any of the following are true:

• A trust changes to an estate

• A living (inter vivos) trust changes to a testamentary trust

• The revocable trust changes to an irrevocable trust

You will not need a new EIN if any of the following are true:

• The trustee changes

• The grantor or beneficiary changes his or her name or address.

Note: Separate EINs are needed if one person is the grantor/maker of multiple trusts. For example, if you have a trust for each of your grandchildren, each trust must have a separate EIN and file a separate tax return. However, a single trust with several beneficiaries requires only one EIN.

How to Apply for an EIN?

You can apply for an EIN online, by telephone, fax, or mail depending on how soon you need to use the EIN.

Important Notice For Anyone Filing Truck Taxes for either IRS Form 2290 or Form 8849 !

The IRS is now verifying EIN (Employer Identification Number) much more thoroughly than they have in the past. Previously, The IRS did not always verify the EIN very extensively. As of now, the IRS requires that all EIN’s be at least two weeks old in order to file with them. So, if you have a very new EIN, it would be best to wait at least 2 weeks before filing.
This information will be particularly useful for individual Owner-Operators, as well as Service Providers that file on behalf of many different Owner-Operators.

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