An employer identification number, better known as an EIN or federal tax ID number, is a nine-digit number that businesses use to file their taxes, hire employees, sell certain goods or perform many other functions. While not every type of business requires this number, most would benefit from EIN. Of course, not every company will be successful, so what happens if a Local business no longer needs its EIN?
What Does One Do With Their EIN
Closing Your EIN Account
If your company closes, or if you were never in operation and don’t need your tax ID number after all, you can contact the IRS to close your account. This requires filling out a form and writing a letter explaining why you are closing your account. You must include a copy of your assignment notice, which you receive from the IRS-EIN-Tax-ID website when you file for the number. Include the company’s legal name, its address and the EIN.
Even after you close your business account with the IRS, your EIN is not usable by another business. Instead of recycling it for other companies to use, which could cause quite a lot of confusion, the IRS will simply mark the number as inactive. If you ever decide to re-open your business, you can contact the IRS again to reactivate the number.
Benefits of an EIN
Even if your company doesn’t require one, you should apply for an EIN. These numbers provide many benefits, including giving your company more financial credibility. That credibility allows you to secure more capital, open bank accounts or business credit cards and more. You can also hire employees or provide a level of protection for your personal name and assets.
The application is available 24 hours a day and is quite simple to fill out. Simply answer a few questions and send it on your way. Many people receive a response the same day. To find out more, get in touch with IRS EIN Tax ID Filing Service.