Most of us apply for an employer identification number easily but when it comes or changing or cancelling it, you might feel baffled on how to do it. You can apply for an employer ID number (EIN) online if your principal business is based in US or its territories.
Let us learn about how you can change or cancel the employer identification number. But before we proceed, it is important to know what EIN is.
Employer ID number (EIN)
An EINis a unique 9-digit number assigned by Internal Revenue Service (IRS) for the purpose of identification to business entities operating in the US. It is also known as federal employer identification number (FEIN).
You need an EIN if the answer for these following questions is yes:
- Do you have employees (including your spouse/ children)?
- Do you operate as a corporation or partnership?
- Do you file an employment, alcohol, or other taxes?
There are other less common reasons as well to apply for an EIN.
How do I make changes in the EIN?
In general, you get an employer identification number and it is yours for the entire span of the business. But there arises some reasons to change your EIN. Firstly, it is important to know if you have to change it or not.
You need to have your EIN, if:
- You change the structure of business like sole-proprietorship becomes a corporation etc.
- You inherit or acquire a business
- Sole-proprietorship declares bankruptcy
- Your corporation gets a new charter from the state secretary
- You became a subsidiary to any corporation
You made a mistake with your EIN, now what?
It’s okay to make a mistake happens with all. If you made a mistake while applying for an EIN, don’t panic & apply for a new one. Instead, you can mend you mistake in few simple steps as recommended by IRS. Let’s see how:
- You need to submit a letter (on company letterhead, if you have one), with the following things mentioned of the current principal officer, owner, general partner or the grantor:
- The name
- Taxpayer Identification Number
- The business entity’s complete name,
- EIN, and
- Mailing address
- Make sure you send the above details correctly so that IRS can identify your account.
- The final step is to send the letter to one of the below mentioned IRS locations based on where you entity operates.
IRS locations for EIN changes
- If your business operates at :
Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia or Wisconsin.
Then the location is:
Internal Revenue Service
Stop 343G
Cincinnati, OH 45999-0023
- If your business operates at :
Alabama, Alaska, Arkansas, Arizona, California, Colorado, Hawaii, Idaho, Iowa, Kansas,Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming, or any place outside of the United States.
Then the location is:
Internal Revenue Service
M/S 6273
Ogden, UT 84201-0023
How to change your EIN if you made the following changes:
You need to change your EIN, when there is any change in your business like name, address etc. But the change varies from case to case based on the type of entity, type of change etc. All you need to do is to file these changes to notify IRS.
Case1: Change in business name
You need to note down the changes in your tax form before you file it. The tax form depends on the type of entity you are. For
example:
- For Corporation: Form 1120/ 1120S which ever you used previously.
- For Partnership: Form 1065
- For sole-proprietorship: Just write a letter (duly signed by the owner) stating where you filed your return with the name change to notify IRS.
Case 2: Change in business address
You need to notify IRS by using form 8822-B in case of change of address, location or the identity of the responsible party.
Case 3: Change in business entity type
You need to notify IRS by using form 8832 incase, if you change your entity by adding members in a single-member LLC to multi-member LLC or to other types. This form is used even when you change your tax status.
For all other changes, the process is simple; you need to send a letter or fax stating the changes to notify IRS at the location based on where your business entity operates.
How to cancel an EIN?
As per the IRS, once you are assigned an EIN it is never re-used by other entities. The EIN remains with the same entity which applied for it as an identification number for tax entries. So, in short you cannot really cancel an EIN.
Instead you can cancel your account with IRS if you feel you don’t need the EIN anymore.
To close your IRS account, write a letter to:
Internal Revenue Service
Cincinnati Ohio 45999
The letter should have the reason for the account closure along with the complete name of the entity, EIN and business address. Also, include a copy of the letter received from IRS when you set up your EIN.
Summing up
Hope that now you have an idea of when you need to change your EIN and how to do it for different cases. If you’re planning to close your IRS account then don’t forget to pay the taxes for which you are liable.
