Sometimes we can get confused with the different references when it comes to the process of filing our taxes with the Internal Revenue Service or the IRS. These references such as “federal tax id number”, “Federal Employer id number (FEIN)”, or the “Employer id number (EIN)”, all refer to the same thing. It refers to the nine digit number that is issued by the US Internal Revenue Service to business entities for the purpose of identification.
This nine digit number is only used for tax administration. When the number is used for identification purposes, it is usually referred to as the Taxpayer id number or TIN and when it is used for the purpose of reporting taxes, it is usually referred to as Employer id number or EIN.
When do you need to apply for this nine digit number? You will need to apply for one if you are:
- Starting a new business.
- Intending to hire employees for your business. This also includes household employees.
- Opening bank account that may require you to furnish an Employer Identification Number or the EIN.
- Changing of ownership of your business, for example forming a partnership.
- Creating a trust or representing an estate that operates a business after the owner’s death. A trust is where one party holds assets for the benefit of another party. A trust needs the trust tax id number to report its income, gains and losses, plus deductions under the federal law.
In order to avoid wasting precious time trying to navigate the IRS online site, many business owners will turn to a third party designee to assists them to obtain the Federal tax id number from the IRS on their behalf for a fee. There will be no charge if you choose to visit the IRS website yourself to complete the application.
The third party designee will process your application for your tax id number with the Internal Revenue Service or IRS and deliver it to you securely via email within 1 – 2 working days. If you need help in filling and completing of your application form, their customer service team will be there to assist you. But if you need any kind of legal advice concerning legal issues, it is advisable to contact an attorney or a law firm because third party designees are not law firms.