Generally, an employer is a person or organization for whom a worker performs services as an employee. As an employer, you are required to withhold and report employment taxes. To file the various employment tax returns, you need a Taxpayer Identification Number (TIN). The TIN is an Employer Identification Number (EIN). However, a sole proprietor may use his or her social security number as the TIN if the business has no employees and is not required to file excise, employment, alcohol, tobacco, or firearms returns. A sole proprietorship is the only type of business that may use a social security number as its TIN.

An entity is considered to be a sole proprietorship for Federal tax purposes even if an individual operates his or her business through a domestic Limited Liability Company (LLC) and does not elect for that LLC to be taxed as a corporation using Form 8832 (PDF), Entity Classification Election. In such a case, the LLC is disregarded for Federal tax purposes. Generally, the disregarded LLC should not request its own EIN.

To obtain an employer identification number, you must complete Form SS-4 (PDF), Application for Employer Identification Number. You can get Form SS-4 at most Social Security Administration and IRS offices.

After you have completed the Form SS-4, you can obtain the EIN by mail, fax, or in some cases, by phone. The Instructions for Form SS-4 provide both IRS service center addresses as well as a phone or fax numbers. By mailing the completed Form SS-4 to the appropriate service center, you can obtain an EIN within 4 to 5 weeks. Using Tele-TIN, you can obtain the EIN right away by telephone. Or, by using Fax-TIN, you can obtain the EIN by fax within 4 working days.

If you already have an EIN, and the organization or ownership of your business changes, you may need to apply for a new number. Some of the circumstances under which a new number is required are as follows:

• An existing business is purchased or inherited by an individual who will operate it as a sole proprietorship, unless the new owner already has an EIN,
• A sole proprietorship changes to a partnership,
• A partnership changes to a sole proprietorship,
• A corporation changes to a partnership or a sole proprietorship; or
• An individual owner dies, and the estate takes over the business.

For more information, refer to Publication 1635 (PDF), Understanding Your EIN.

Tax Topics & FAQs | 2001 Tax Year Archives | Tax Help Archives | Home