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In response to your application for an Employer Identification Number (EIN), the IRS will send you an EIN verification letter to confirm that they have received your request. The Employer Identification Number is important to businesses because it identifies businesses to the Internal Revenue Service.
The importance of an EIN letter
An Employer Identification Number—also known as an EIN—is a nine-digit number issued by the IRS to a business or a company that requested one. The Employer Identification Number (EIN) is used for businesses, while the Social Security Number or SSN is used for individuals. It is recommended that you apply for an EIN verification letter if your business plans to:
◉ File tax returns
◉ Obtain industrial permits and business licenses
◉ Open bank accounts
◉ For tax purposes and the submission of Form 1099 for contracting work.
If you run a business as a sole proprietorship, you can obtain an IRS Form 147C letter so that you don’t have to use your Social Security number for your business. Lending institutions often require government EIN numbers before opening a bank account for your business. You might be asked for your business’ Employer Identification Number (EIN) by a tax-exempt organization or your investors.
The IRS will usually send you a confirmation letter within 8 – 10 weeks of assigning you an EIN. This verification letter will be mailed to the business address you have given on your application.
In some cases, you may lose or misplace your original tax ID certificate. If this is the case, you may want to try to get another letter from the IRS. This letter serves as a replacement for the original verification letter that you lost.
How do you verify a company’s Employer Identification Number?
The Employer Identification Number (EIN) is similar to a Social Security Number, but is used for business purposes. Whether you plan to use the number for business or personal reasons, you should keep it private.
However, if you are an authorized representative of your business, there is no easy way for you to verify your EIN. However, there is one exception: registered tax-exempt or non-profit organizations.
Lost or Misplaced EIN Verification Letter
The Internal Revenue Service allows representatives to confirm or update your business’s EIN. As the proprietor of a business, you are regarded as an authorized representative. Officers of your company, partners, and for a trust, the executor or the trustee of an estate, can serve as representatives.
When a person is not authorized to represent someone or something
Anyone who isn’t a representative can ask that individual to sign the Tax Information Authorization and then submit it. In a catch-22 situation, the employer identification number is needed. If a company loses its number completely, it is required that the authorized representative should call. If your company has an EIN but you require verification because you do not yet have a tax ID letter, you will find out this information after speaking with the IRS.
In the case of Exempt Organizations
You can verify the EIN number of a charitable organization at the IRS site, where you can conduct an Exempt Organization Select Check. This tool can be used to verify information about any IRS-registered charitable organization without the need for an EIN letter.
Because they are not-for-profit organizations, information about exempt organizations is in the public records. The company’s profile can be searched by name using the site’s search tool. EIN verification of tax-deductible donations and the company’s status can be done at this website.
Moreover, the company’s website also tells you if its tax-exempt status is revoked for failing to file Form 990-N. This form confirms the amount of income tax the company has paid or will have to pay. Even tax-exempted companies are required to file income and report it. Otherwise, the company may risk losing its charitable status.
Other methods of confirming an EIN
You can also get your EIN verified by the IRS. While the IRS considers an EIN to be private information, most employers will comply with requests to see it. This number appears on payroll checks and on 1099s for contractors. The benefit is also available to employers who provide contract work.
If you file a business or personal tax return and provide the IRS with the wrong Employer Identification Number, your form will be rejected. Because of inconsistent data checks, the IRS might request further documentation. If you are an employer, it may be necessary to verify your EIN so you can avoid both overstating or understating your income.
EIN Confirmation Letters
Verify your own EIN
What should you do if you cannot locate a document with your EIN on it to verify your entity? The Internal Revenue Service allows you to verify your EIN number without the use of a 147C letter. If you have already set up your business using your Employer Identification number (EIN), these documents should contain that number:
◉ Banking statement
◉ Your applications for bank accounts, loans, or credit card
◉ Fictitious name statement
◉ Sales tax permit
◉ The tax returns of the previous year
◉ Business license
◉ 1099-Misc forms.
If you still cannot prove your EIN without your EIN letter, follow these steps:
◉ Call the Business & Specialty Tax Line of the Internal Revenue Service.
◉ You will have to provide your name, address, and phone number before they provide you with their number. The reason is that only authorized personnel can obtain this number.
◉ Once you have verified your information, we will give you a confirmation number over the phone.
◉ In order to refer to your foreign tax identification number more easily, repeat the number to the person on the phone and then keep it in a password-protected file. The IRS warns taxpayers to be on the lookout for individuals who steal other people’s EINs to submit false tax returns and claim fraudulent refunds.
You must guard your EIN as securely as you guard your SSN. Always lock up all documentation containing this number. Destroy all documents containing the number by shredding them. You should also use a dedicated online application site that requests your firm’s EIN when submitting applications.
With all of the EIN information, you might feel overwhelmed. A report by the American Pet Products Association in 2016 found that 68% of US households owned a pet. Of these animals, cats numbered 94 million and dogs 90 million.
These statistics indicate that pets are important to many Americans. So does an EIN, which allows your business to efficiently manage its finances. You will have this number assigned to your business structure indefinitely. Like the SSN, this number is the legal identifier for your business when filing tax returns.
How can I obtain a copy of my EIN verification letter?
An Employer Identification Number (EIN) is a unique number matched to your business—a Social Security Number for businesses. All businesses require an Employer Identification Number (EIN). You can check whether you need one based on the specific circumstances by accessing a quick checklist on the IRS website.
You can apply for an EIN and verify your EIN in the following ways:
◉ To obtain your business’ EIN, use the online application. You will receive a response right away. Then you can print out your EIN confirmation letter immediately. We highly recommend saving this document so that you will have a digital record of your documentation and transaction.
◉ If you choose to apply using the Form SS-4, complete the form and fax it. You can expect your tax ID number to arrive within a week.
◉ If you apply by mail, we will send your letter to you within two weeks.