Clearing a Confusion between TIN & EIN

Clearing a Confusion between TIN & EIN

The IRS provides companies a nine-digit number known as a taxpayer identification number (TIN) or an employer identification number (EIN). The number is used by the Internal Revenue Service to identify taxpayers who must file various company tax filings. Employers, single proprietors, companies, partnerships, nonprofit associations, trusts, decedents’ estates, government agencies, some people, and other business entities all utilize TIN/EIN.

To kickstart your business in the United States, an EIN is important. Therefore, click now to consult with the best CFOs at USAIndiaCFO to find what you need.

Is TIN and EIN the same thing?

The nine-digit number issued by the IRS is known as a Federal Tax Identification Number, often known as a 95 Number,E.I.N. Number, or Tax I.D. Number. It’s the same number with multiple names.

What is the need foran EIN?

NIST is putting in place a new financial management system that will consolidate customer data from a variety of sources. We are attempting to reduce the number of duplicate items in our customer database to maintain the central database manageably. When a company entity’s actual name is unavailable or it is impossible to distinguish it from other firms with similar names, the TIN/EIN will be used to uniquely identify it. An electronics also need to know about their financial management.

Is there an Expiration date to EIN?

EINs never expire. An EIN cannot be renewed after it has been assigned to an entity, however, a firm may choose to cancel or amend its present EIN for certain reasons. Purchase or becoming a subsidiary of another company, changes in the ownership structure of the company, or if you are a single proprietorship facing bankruptcy procedures are all examples. You do not need to obtain an EIN number if your business location or name changes, but you must notify the IRS of the changes. An IRS Form 8822 B can be used to report a change of business address. You can use IRS Form 8832 to change the structure of your business.

Your previous EIN will be automatically replaced by a new EIN allocated to your business, and the old EIN will become inactive and will not be renewed. Similarly, if you close your business, your EIN will become inactive, thereby ending your IRS account. Because an EIN is a permanent Federal taxpayer identification number once given, there is no way to cancel or delete it.

Organizations that are tax-exempt, charitable, and non-profit, as well as EINs

An EIN does not automatically provide a non-profit organization tax-exempt status from the IRS, which must be secured separately. A national non-profit organization’s chapters must each have their own EIN, but the central organization can apply for a group tax exemption. The IRS website makes tax exemption status searchable, allowing anybody to check an entity’s registration, status, and financial assets. Before sending money to a charity, use the IRS Tax Exempt Organization Search to check the charity’s IRS Form 990 tax-exempt status. 

It’s usually a good idea to obtain an EIN number and double-check if the organization you’re applying for has been lawfully created before asking for an EIN. Almost all organizations that register for EINs risk having their tax-exempt status terminated automatically if they fail to file a required return or notification for three years in a row. The three-year term starts when the company is formally founded; it is advisable to form the company lawfully before asking for an EIN.

You May Also Like

About the Author: Peter Beaumont

Peter Beaumont is a senior reporter on Daily Mid Time Global Development desk. He has reported extensively from conflict zones including Africa, the Balkans and the Middle East and is the author of The Secret Life of War: Journeys Through Modern Conflict. Email: