TIN Matching

How Do Your Get A Tax ID Number?

Most people already have their own taxpayer identification numbers in the form of a social security number, which can be used for business purposes with Schedule C companies and sole proprietorships. Typically, people setting up LLCs, C Corporations, and S Corporations need to have an EIN (Employer Identification Number) created, and luckily the IRS makes it very easy to do this. .

Federal Tax ID Number If you want to get into a good debate, just bring up the use of a Social Security number. What was once meant to only ensure your access to an entitlement is now ubiquitous, and you can't seem to get any financial services without it. People steal social security numbers and use them to create their own identities or ruin your credit rating as they enrich themselves.

The importance of a taxpayer identification number should not be underestimated whether you are using your own SSN or an EIN for a business. Your bank or a service like PayPal is going to send documents straight to the IRS using that information, so you want to be sure it all matches up if you want to get any money back or even just make sure your tax returns don't invite an audit for underreporting.

How To Apply for a EIN

The IRS has made it very easy to apply for an Employer Identification Number, or EIN. In the past, you might have had to file a form SS-4 to get an EIN, but now the IRS will allow you to apply for one EIN per responsible party per day. These numbers are also used for estates and trusts as well. The new IRS online application form asks you a series of questions and once you are finished you are issued a number immediately upon successful completion. In the past, it took days or weeks to get this number issued, and this often held up other business applications including bank accounts and employer programs such as healthcare. TINs and EINs are also used extensively in many B2B processes and for payments along with a W9 form, so don't wait to get your EIN!

Make Sure TIN Numbers Match

If your TIN number is not matched and validated you may experience an unfortunate side effect in the form of 28% backup withholding on things like your credit card processing account. The IRS will essentially direct the bank or processor to hold back those funds until the end of the year, and you will be strongly motivated to fix whatever mismatch is in place. Most commonly, this happens when businesses are purchased or transferred, but there are also issues where there is a minor spelling difference between the account you have on file with the bank and the original CP575 form that shows the name. As a hint, the one on file with the IRS is generally seen as the "right" one, unless you get it changed. To find out what's on file if you don't have the CP-575, then you can always request Form 147C, which has to be faxed or mailed to you and can't be emailed or shown online. However, you can order it online, which is a plus.