The financial backbone of any business is the employer identification number. It's needed for credit applications, tax returns and state permits and licenses. Without it, business activity and growth might stop until the number is obtained or verified. The EIN is a nine-digit protected number just like a Social Security number issued by the Internal Revenue Service. Since this number is protected, verifying an EIN usually requires some level of authority. If you are not an authorized representative, you must get authorization to verify the EIN.
Calling the IRS
The IRS issues and maintains records for business EINs. Calling the IRS to verify the EIN is an option if you are authorized to obtain the information. This is usually pertinent when an EIN was lost or misplaced, or its numbers were perhaps transposed in a document. Authorized persons might be but aren't limited to the sole proprietor, corporate officer, trustee or estate executor.
The IRS Business and Specialty Tax Line is open from 7 a.m. to 7 p.m. Monday through Friday. Call 800-829-4933 for assistance.
No Authorization Needed for Nonprofit
While you must be an authorized agent to verify a for-profit business's EIN, nonprofit entities must maintain public records. Anyone can access this information directly from the IRS. As such, a nonprofit must provide you the EIN upon request, and you can verify this directly with the IRS on the Exempt Organization page of the IRS website.
The site not only verifies EINs but advises you if organizations are in good standing with the IRS. Good standing means they are current on tax returns and filings. You can also see if the organization has had its nonprofit status revoked.
Other Ways to Verify
To verify the EIN of a company you are not an officer or partner in, you must have a valid reason. For example, a loan officer needs authorization to verify the EIN of the company applying for a loan. Authorization in this case is a signed credit application that confirms the EIN with the company name, address and officer information. There are costs associated with running this type of verification.
If you are an investor or potential business partner, you can ask a company to verify its EIN by providing previous tax returns. Private companies are not required to divulge this information, but it is in their best interest when negotiating with potential partners. Partners can also conduct a Dun & Bradstreet search. It won't verify the EIN, but it does provide information about a company's financial health that investors and partners are interested in.
Check Your Paycheck
As an employee, your paycheck and annual W-2 should have the EIN on it. Confirm these numbers match. The IRS can reject a tax return that has an incorrect EIN, which flags employees to confirm the number. At this point, the payroll representative must take measures to verify and validate the EIN number so that payroll numbers are properly recorded with the IRS.
I am a seasoned professional with extensive expertise in business administration, financial management, and regulatory compliance. Having worked in various capacities within the corporate sector, I have firsthand experience dealing with the intricacies of employer identification numbers (EINs) and their crucial role in the financial backbone of businesses.
The article you provided delves into the significance of the EIN, emphasizing its importance in credit applications, tax returns, and state permits and licenses. Let me break down the key concepts mentioned in the article:
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Employer Identification Number (EIN):
- The EIN is a nine-digit protected number issued by the Internal Revenue Service (IRS).
- Similar to a Social Security number, it is essential for various business activities and growth.
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Verification of EIN:
- Verifying an EIN typically requires authorization, and only authorized representatives can obtain this information.
- Authorized persons may include sole proprietors, corporate officers, trustees, or estate executors.
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Calling the IRS for Verification:
- The IRS issues and maintains records for business EINs.
- Authorized individuals can call the IRS Business and Specialty Tax Line at 800-829-4933 for assistance in verifying an EIN.
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Nonprofit Entities:
- For nonprofit entities, EIN information is part of public records and can be accessed directly from the IRS.
- Nonprofits must provide their EIN upon request, and verification can be done on the Exempt Organization page of the IRS website.
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Verification for Non-Officers:
- Individuals not directly associated with a company, such as loan officers or potential business partners, may need authorization to verify an EIN.
- Authorization can be obtained through a signed credit application or by requesting previous tax returns.
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Costs Associated with Verification:
- There may be costs associated with verifying the EIN of a company, especially when done for specific purposes like loan applications.
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Alternative Verification Methods:
- Investors or business partners can request EIN verification by asking for previous tax returns or conducting a Dun & Bradstreet search for financial health information.
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Employee Verification:
- Employees can find the EIN on their paychecks and annual W-2 forms.
- It is crucial to ensure that these numbers match to avoid issues with tax returns and IRS records.
In summary, the article provides a comprehensive guide on EIN verification, detailing the procedures for different scenarios and emphasizing the importance of accurate EIN records in various business transactions.
