An Employer Identification Number (EIN) is a unique nine-digit identifier assigned by the Internal Revenue Service (IRS) to businesses and other entities operating in the United States for tax purposes. Also known as a Federal Employer Identification Number (FEIN), the EIN is used to identify a business entity and is analogous to an individual’s Social Security Number.

Here are some key points about EINs:

1. **Identification:** The primary purpose of an EIN is to identify a business entity for federal tax purposes. It is used on various documents and forms filed with the IRS, such as tax returns, employment tax reports, and other business-related filings.

2. **Business Entities Requiring an EIN:** EINs are typically required for various types of business entities, including corporations, partnerships, limited liability companies (LLCs), sole proprietorships with employees, estates, trusts, and certain other entities.

3. **Application Process:** Businesses can obtain an EIN from the IRS by applying online, by mail, fax, or phone. The online application is the most common and efficient method. The application is free of charge, and the IRS issues the EIN immediately upon successful submission of the online form.

4. **Use of EIN:** Once assigned, businesses use their EIN on all federal tax-related documents, such as tax returns and forms. Additionally, banks often require an EIN when opening a business bank account, and it may be requested by other entities for various business transactions.

5. **Name and Address Changes:** If there are changes in the business’s name or address after obtaining an EIN, the IRS should be notified of these changes promptly. This helps maintain accurate records and ensures that the business receives any correspondence from the IRS.

6. **Sole Proprietors without Employees:** While sole proprietors without employees are not required to have an EIN, they may choose to obtain one for business purposes, such as separating business and personal finances or for privacy reasons, as opposed to using their Social Security Number.

7. **International Entities Doing Business in the U.S.:** Foreign entities conducting business in the United States may also need an EIN for tax reporting purposes.

8. **EIN and Business Structure:** The structure of a business (e.g., corporation, partnership, sole proprietorship) influences whether an EIN is required. Different forms are used for obtaining an EIN depending on the business structure.

Businesses are encouraged to obtain an EIN early in their formation process to ensure that they have the necessary identification for tax and financial purposes. The EIN is a crucial component of a business’s legal and financial identity.