Overview of EIN
An EIN is a permanent identification number for a business entity. The IRS cannot cancel or reuse an EIN once assigned. If an EIN is not needed, you can close the associated business account by writing to the IRS. Include the complete legal name, EIN, business address, and reason for closing the account. The EIN will still belong to the business and can be reactivated if needed.
Acquiring and Using EIN
To get a new EIN, the current owner must first close the existing account. Then the new owner can apply for a new number. If you change entity structure or business name, notify the IRS with supporting documents. Final tax filings do not automatically close an EIN when a business dissolves. The number remains permanent but the account can be closed if no longer needed.
Importance of EIN
Besides identifying a business for tax purposes, an EIN enables hiring employees, paying taxes, and opening business bank accounts. It serves as a unique ID for each legal entity, similar to how Social Security Numbers function for individuals. Acquiring an EIN is compulsory for legally formed companies to mark themselves for tax services.