An EIN identifies a business, while an SSN and ITIN identify individuals. Before applying, an applicant usually first completes state-level entity formation, then confirms the Responsible Party, legal name, address, entity type and reason for applying. International application methods, telephone eligibility, fax or mailing addresses and processing times can change, so the current IRS page and Form SS-4 instructions must govern.
KEY TAKEAWAYS
Key takeaways
- An EIN, SSN and ITIN are different numbers and cannot replace one another.
- Online applications have eligibility limits; overseas applicants without an SSN or ITIN cannot assume they will receive an EIN online immediately.
- A third-party service provider cannot change the IRS decision or guarantee processing times.
First, distinguish the three numbers
An EIN is used by the IRS to identify a business or other eligible entity; an SSN is a Social Security number; and an ITIN is a tax identification number for individuals who are not eligible for an SSN but have a US federal tax purpose.
A founder without an SSN or ITIN may still apply for an EIN for an already formed US entity, but the application channel and how the form is completed must follow IRS rules.
What should be prepared before applying?
First confirm that the company’s legal name matches the state-formation documents. Then organize the Responsible Party, entity type, mailing address, formation date, principal activity and reason for applying. An inconsistent name, suffix or address can later cause the bank and tax records not to match.
The Responsible Party should be the person who ultimately owns or controls the entity, or who has ultimate effective control over the entity and its funds. It should not be filled in casually with an agent that merely provides an address.
Why can you not assume an online application is available?
The IRS online EIN Assistant has eligibility limits for both the applicant and the Responsible Party. If the principal place of business is outside the United States, or the Responsible Party does not have a valid personal tax number that meets the system requirements, the applicant will usually need to review the international application route.
Do not borrow someone else’s SSN to enter the online system, provide an untrue address or list a service provider as the actual controlling person. Doing so makes company records inconsistent from the outset.
Which Form SS-4 fields need particular attention?
Form SS-4 distinguishes the legal name, trade name, mailing address, entity type, Responsible Party, formation date, expected employees and principal activity. Each item should be consistent with the actual company documents and plans.
Entity classification and tax elections are not simply translation questions. For an LLC, the number of members, owner identities and whether a tax election is made can affect subsequent treatment. If uncertain, consult a tax professional first.
What should be done after obtaining an EIN?
Keep the IRS confirmation document and make sure the company name and address match the state filings, bank application, accounting system and later tax filings. An EIN does not automatically open bank, payment or tax accounts.
If a bank or platform requires additional ownership, address, business or tax information, it must still be submitted through that institution’s separate KYC process.
Four common mistakes
- Applying under an unsettled legal name before the company has been formed
- Incorrectly listing the registered agent or service provider as the Responsible Party
- Treating an EIN as proof that a bank account or Stripe approval is assured
- Relying on telephone numbers, fax addresses or processing times from old blog posts without checking the current IRS page
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