“Taxpayers can now request an Employer Identification Number (EIN) through a Web-based system that instantly processes requests and generates identification numbers in real time, the Internal Revenue Service announced today.
"This new and improved online application will reduce the time it takes taxpayers to get an EIN," said Richard Morgante, Commissioner of the IRS Wage & Investment Division. "Essentially they can get one while they wait –– within minutes."
Here's how it works. A taxpayer accesses the Internet EIN system through www.IRS.gov and enters the required information. If the information passes the automatic validity checks, the IRS issues a permanent EIN to the taxpayer. If the information does not pass the validity checks, it is rejected. The taxpayer then has an opportunity to correct the information and resubmit the application.
The Internet EIN application is interactive and asks questions tailored to the type of entity the taxpayer is establishing. This is similar to popular tax processing software packages on the market.
The system provides "help" screens throughout the application process. This means taxpayers will no longer have to print the EIN instructions and separately search for answers while requesting an EIN.
When the EIN application process is complete, a taxpayer has the option to view, print and save his or her confirmation notice, as opposed to waiting for the IRS to mail it. Third parties authorized by the taxpayer can also be provided with the EIN, but the third party cannot view, print or save the confirmation notice. Instead, the confirmation notice is mailed to the taxpayer.
An EIN assigned through Internet submission is immediately recognized by IRS systems. Taxpayers can begin using the EIN immediately for most business purposes.”
A new corporation or partnership, any entity that will be filing a separate income tax return, will need a federal Employer Identification Number. A sole proprietor or a one-man LLC reporting income and expenses on a Schedule C does not need a separate federal ID number – it can use the owner’s Social Security Number. However, if the sole proprietor or one-man LLC will be hiring employees and paying wages it will need an EIN in order to file payroll tax returns. It is also possible that the bank where the business checking account will be maintained may require a separate EIN.
If I have occasion to use this new process in the future I will let you know how it goes.