Getting and Changing Employer ID Numbers (EINs)

If you have a company, you need an Employer Identification Number (EIN), which you can obtain online at no cost. The online federal EIN application is in a question-and-answer format, with embedded help topics and hyperlinked keywords and definitions. It must be completed in one session since you cannot save it and return later.
Once all validations are complete, you will get your EIN immediately. You can download, save, and print your confirmation notice. Beware of websites that charge for this free service. You can check your state to discover whether you need a state number or charter.
When you apply for an EIN, it is presumed that your business structure is legal. A good practice is to be sure your organization was formed legally before you apply. There is a three-year period if you fail to file a required return or notice.
When do you need a new EIN?
A sole proprietor needs a new EIN when there is a change of ownership or structure. A new EIN is not required if there is a name change, location change, location added, or if you operate multiple businesses.
As a sole proprietor, a new EIN is required if:

  • You are subject to bankruptcy proceedings.
  • You incorporate.
  • You take on partners or operate as a partnership.
  • You purchase or inherit an existing business that you operate as a sole proprietorship.

If you incorporate, you will need to obtain a new EIN if:

  • Your corporation receives a new charter from the secretary of state.
  • You are or become a subsidiary of a corporation using the parent’s EIN.
  • You change to a partnership or a sole proprietorship.
  • A new corporation is created after a statutory merger.

You do not need a new EIN as a corporation if:

  • You are a division of another corporation.
  • The surviving corporation uses the existing EIN after a corporate merger.
  • Your corporation declares bankruptcy.
  • Your corporate name or location changes.
  • You choose to be taxed as an S corporation.
  • You reorganize your corporation and it changes only the identity or place.
  • Your business structure remains unchanged as conversion occurs at a state level.

A partnership needs a new EIN if:

  • You incorporate.
  • Your partnership is taken over by one of the partners and is operated as a sole proprietorship.
  • You end an old partnership and begin a new one.

Partnerships do not need a new EIN if:

  • Your partnership declares bankruptcy.
  • The partnership name changes.
  • You change the location of the partnership or add locations.
  • A new partnership is formed because of the termination of a partnership under IRC Section 708(b)(1)(B).
  • Fifty percent or more of the ownership of the partnership (measured by interests in capital and profits) changes hands within a 12-month period (terminated partnerships under Reg. 301.6109-1).

A lost or misplaced EIN can be verified by visiting EIN instructions. Also, the IRS can help search for your EIN by calling the Business and Specialty Tax Line at 800-829-4933 . The hours of operation are Monday through Friday, 7 a.m. to 7 p.m.
The IRS is limiting EIN issuance to one per responsible party per day. The responsible party is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets.
When you apply for an EIN with the IRS assistance tool, your nine-digit federal tax ID becomes available immediately upon verification.

Need Guidance and Help?
If you need advice, give us a call and we will be happy to discuss your situation.