What is an EIN, and Do I Need One?
An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. EINs are important for tax compliance purposes, and you’ll also need one to open your company bank account. Applying for an EIN if applicable (and it will be applicable if you’ve incorporated as a Delaware C Corp) is one of the many important post-incorporation steps for managing your company. The IRS provides detailed guidance on applying for EINs. To put it simply, if you are a corporation or have employees you will need to get one.
How Do I Apply for an EIN?
If your business is located in the United States and you have a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), you can apply for your EIN online through the IRS website. This is the fastest and easiest way to apply for an EIN, and will allow you get your EIN immediately and print a confirmation (no forms needed—you simply answer a series of questions). You can also apply by fax (and get an EIN within four business days) or by mail (approximately four weeks processing time) with your completed Form SS-4, the Application for Employer Identification Number.
Situations When You Might Need a New EIN
There are some circumstances that will require you to apply for a new EIN for your company after receiving the initial one. For C Corps, these are mostly related to changes in your business’s ownership or structure. For example, if a merger creates a new corporation or your corporation becomes a partnership, you would need a new EIN. However, something like changing your business’s name or address would not require a new EIN.
Getting an EIN as a Foreign National
If you’re a foreign national (not a U.S. citizen or resident alien and you reside outside of the U.S.) who starts a company in the United States, getting an EIN for your company can be slightly more complex. You can’t apply for it online unless you have an ITIN (Individual Taxpayer Identification Number). Under these circumstances your options to get an EIN are (a) get it yourself over the phone by calling the IRS directly, (b) mail or fax in the SS-4 to the IRS, or (c) hire a service provider to get the EIN for you.
→ Option 1: Call the IRS directly
If you choose to call the IRS’s dedicated phone number for international applicants to apply for an EIN, you need to be prepared. The person calling this number to obtain the EIN should be authorized to receive it (whether that person is the founder or a third party designee, like an attorney), and will need to be able to answer all the questions on the Form SS-4. In fact, it’s recommended that you fill this form out before you contact the IRS to make sure that you have all the information you need! And if you call, be prepared to wait until you get to the front of the phone queue. If you are calling as the responsible party (e.g., you are the founder), you will get your EIN at the conclusion of the telephone interview with the IRS. You should fill in that EIN on the SS-4 you filled in pre-call and keep that form for your records (add it to Shoobx and it will form part of your data room). If you have a third party designee calling the IRS (i.e., a service provider you hired to get the EIN for you), that third party designee will have to send in the signed SS-4 to the IRS.
→ Option 2: Mail or fax the Form SS-4 to the IRS
If you choose to complete the Form SS-4 and either mail it or fax it, and you don’t have a SSN or ITIN, you can write “N/A - Foreign” on line 7b which asks for your SSN or ITIN. If you have questions on the form and the instructions don’t provide you with an answer, you can speak with an IRS employee on their international applicant phone line noted above to get up-to-date guidance on completing the SS-4.
→ Option 3: Hire a service provider to get your EIN for you
Shoobx does not provide the services of obtaining your EIN; however, there are companies that will do this for you. For instance, several of our clients have had success with Harvard Business Services. This isn’t a free service, though, so be prepared to pay a small fee.
The IRS website has an incredible amount of detailed information about EINs and other tax-related queries, and should be consulted for the most up-to-date policies and procedures. Their website also notes that provision of EIN’s is a free service provided by the IRS, so unless you are particularly DIY-averse you should be able to successfully navigate their processes (whether online, over the phone, or via mail/fax) to get an EIN for your company!