Practical Accounting Procedures

Detailed explanation of Practical Accounting Procedures based on official information from 各州州務長官事務所・IRS. Permanent Residency (Green Card)

Published: January 12, 2026

Practical Accounting Procedures for EIN Registration in the USA

1. Overview

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States. It is essentially a Social Security Number for a business. Obtaining an EIN is a fundamental step in establishing a company's legal and financial identity. It is required for essential business functions such as opening a bank account, hiring employees, filing tax returns, and applying for business licenses. Proper accounting procedures from the outset, centered around the EIN, are critical for maintaining compliance, organizing finances, and building a foundation for accurate financial reporting.

2. Applicable Objects & Scenarios

An EIN is required for most business structures, including:

  • Corporations and LLCs: Required for all corporations (C-Corp, S-Corp) and Limited Liability Companies (LLCs) that have more than one member or elect to be taxed as a corporation.
  • Partnerships: Required for all general partnerships, limited partnerships, and limited liability partnerships.
  • Sole Proprietors: Required if the sole proprietor hires employees, files excise, alcohol, tobacco, or firearms tax returns, or establishes a Keogh retirement plan. It is also often required to open a dedicated business bank account.
  • Estates and Trusts: Required for estates of decedents and certain types of trusts.
  • Non-Profit Organizations: Required for tax-exempt organizations.
  • Government Agencies and Other Entities: Required for certain other entities like farmers' cooperatives and plan administrators.

You will need an EIN when you start a new business, hire your first employee, change your business structure (e.g., from a sole proprietorship to an LLC), or open a business bank account.

3. Core Conclusions

  • An EIN is a mandatory identifier for most business entities for federal tax purposes.
  • The application process is free and can be completed directly with the IRS online, by fax, or by mail.
  • The "responsible party" listed on the application must be an individual (not an entity) with a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Integrating your EIN into your accounting system from day one is crucial for clean bookkeeping and tax compliance.
  • The EIN is permanent; however, you must apply for a new one if the business structure or ownership changes significantly.

4. Procedures & Steps

Step 1: Preparation

Before applying, gather the necessary information about your business and the "responsible party."

  • Determine Legal Structure: Know your business entity type (e.g., LLC, Corporation, Sole Proprietorship).
  • Identify Responsible Party: This is the individual who controls, manages, or directs the entity and the disposition of its funds. You will need their name, SSN or ITIN, and address.
  • Business Details: Have your legal business name and trade name (DBA) ready, along with the complete physical address.
  • Reason for Applying: Know the principal reason for applying (e.g., started a new business, hired employees).
  • Business Activity: Identify the principal business activity and the expected number of employees.

Step 2: Application & Submission

The primary and fastest method is the online application on the IRS website.

  1. Access the Online Application: Navigate to the IRS EIN Assistant tool on the official IRS website.
  2. Complete the Interview-Style Form: The tool will guide you through a series of questions based on your entity type and situation. This generates Form SS-4.
  3. Validate Information: Carefully review all entered details about the responsible party and the business.
  4. Submit Application: Upon final validation, submit the form electronically.
  5. Alternative Methods: If you cannot apply online (e.g., the responsible party does not have an SSN/ITIN), you can complete Form SS-4 and submit it by fax or mail. Processing times are longer for these methods.

Step 3: Review & Confirmation

  • Immediate Issuance (Online): If your online application is successfully validated, you will receive your EIN immediately upon completion. You can download, save, and print your EIN confirmation notice (CP 575).
  • Fax/Mail Confirmation: For fax applications, you will receive your EIN confirmation via fax within approximately one week. For mail applications, processing can take several weeks.
  • Integrate into Accounting: Upon receipt, immediately record your EIN in your business records, provide it to your bank, and set it up in any accounting software (e.g., QuickBooks, Xero) as your primary business tax ID. Use it on all federal tax documents, payroll forms, and business applications.

5. Frequently Asked Questions (FAQ)

Q1: Is there a fee to get an EIN from the IRS? A1: No. The IRS provides EINs free of charge. Be wary of third-party websites that charge a fee for this service; you can apply directly on IRS.gov at no cost.

Q2: Can I use my SSN instead of an EIN for my business? A2: A sole proprietor with no employees may use their SSN for federal taxes. However, obtaining an EIN is recommended to protect your personal identity, separate business credit, and is required for many business functions like opening a bank account.

Q3: How long does it take to get an EIN? A3: When using the online IRS EIN Assistant during its hours of operation, you receive your EIN immediately upon completion. Fax applications take about a week, and mail applications can take several weeks.

Q4: What if I lose my EIN confirmation letter? A4: You can call the IRS Business & Specialty Tax Line at 800-829-4933. The representative can provide your EIN if you can verify your identity as the responsible party. You can also find it on prior tax returns or official notices from the IRS.

Q5: Do I need a new EIN if I change my business name or location? A5: Generally, no. A change in business name or location does not require a new EIN. You must inform the IRS of the change by filing the appropriate form (e.g., for an LLC, file Form 8832 if it affects tax classification).

Q6: When do I need a new EIN? A6: You typically need a new EIN if your business structure changes legally (e.g., you incorporate your sole proprietorship), you purchase or inherit an existing business, or you establish a partnership. The IRS provides a detailed chart on their website.

Q7: Can a non-US resident (without an SSN) get an EIN? A7: Yes. A foreign person or entity can obtain an EIN. The responsible party must have an ITIN. The application cannot be completed online in this case; you must complete Form SS-4 and apply via fax or mail, indicating "Foreign" as the responsible party's country.

6. Risks & Compliance

  • Accuracy is Critical: Providing incorrect information on the SS-4 can cause significant delays and complications with tax filings and banking.
  • Beware of Scams: Only use the official IRS website (IRS.gov) for the free online application. Many commercial sites mimic the IRS and charge unnecessary fees.
  • One EIN Per Entity: Do not apply for multiple EINs for the same entity. If you are unsure if you have one, contact the IRS to verify before applying.
  • Compliance Follow-Through: Obtaining an EIN is the first step. You must then use it to file required federal and state tax returns, make tax payments, and comply with employment tax responsibilities if you have employees.
  • Disclaimer: This article provides general guidance on accounting procedures related to EIN registration. It is not a substitute for professional legal, tax, or accounting advice. Tax laws and procedures are complex and subject to change. Please verify all information with official IRS sources or consult with a qualified professional regarding your specific situation.

7. References & Sources

8. Related Topics

  • Choosing a Business Structure (LLC, Corporation, etc.)
  • State Business Registration and Sales Tax Permits
  • Setting Up Business Bank Accounts
  • Basic Bookkeeping and Accounting for Small Businesses
  • Federal Tax Obligations for Businesses
  • Hiring Your First Employee: Payroll Setup and Compliance
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