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Employer Tax ID Question


Tax Prep by Deb

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I have a question and hopefully some one here will know the answer.  Early 2000 I had a client and I helped him get his employer identification number with IRS as a sole proprietor.  About 5 years later he incorporated and a new number was issued for the corporation.  The corporation was dissolved about three years later and he as done nothing but tend to his rentals since.  He is now getting ready to start back up again but as a sole proprietor so will he need to get a new number or can he use the first one that we got early in 2000?

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In my experience, the IRS will not issue two EIN numbers to a sole proprietor. So you need to find out if the IRS considers the old number to still be an active number or you can apply for a new number and if the old number is still active, your application will reject.  Pick your poison.

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Couldn't find out from IRS -- their website answers every other thing in the world (except what you want to know, of course).  But here's a quote from a payroll company and I'm guessing that, being in the business, they probably would know.  According to them the numbers never expire and are never reissued to anybody else.  

https://www.patriotsoftware.com/payroll/training/blog/what-is-an-fein/  :rolleyes:

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An EIN stays with a sole proprietor for life.   And a new number was proper for a corporation as the corporation is a separate entity from a sole proprietor.  Regardless of what business the INDIVIDUAL sole proprietor is in, he uses the same EIN number for his INDIVIDUAL business(es).

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9 minutes ago, Cathy said:

An EIN stays with a sole proprietor for life.   And a new number was proper for a corporation as the corporation is a separate entity from a sole proprietor.  Regardless of what business the INDIVIDUAL sole proprietor is in, he uses the same EIN number for his INDIVIDUAL business(es).

And for the correct answer:  Go to IRS.gov and search for "Do you need a new EIN number".  There are a couple of cases where a new number is needed by a Sole Proprietor.

Looked for the "Edit" button but couldn't find it....was going to "fix" my first reply and hoped no one had read it....oh well!!!

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Yes Cathy I did see the info you spoke of, but he really doesn't fit those situations, one has to do with bankruptcy.  So it was my understanding too, that the number stays with him and still should be ok to use.  I know years ago I had a situation were we marked on the 941 the final wages were paid and later we used the same number so it doesn't look like anything has changed since then.

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I have found that posting a question to the forum is the *best* way to make the information you have been searching and hour for to jump out from wherever it has been hiding.  As soon as you hit "submit" it jumps out, calling "surprise! here I was, all along - fooled you good tee hee!"

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3 hours ago, michaelmars said:

I have clients with multiple ein's for multiple schedule C businesses.  Especially if employees are involved, you need to keep it all separate.  Not an issue anymore since everyone operates as a LLC and even disregarded ones get their own ein.

Interesting, since I had just the reverse happen to a payroll client of mine who had two Schedule C businesses, a Espresso stand and a Garden Supply Store.

The IRS forced to him to consolidate his payroll form submissions. I was doing payroll for the Espresso Stand and his bookkeeper was doing payroll for the Garden Store.

Ended up being total mess, which dragged on for several years after the Garden Store ended up in bankruptcy.

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Thanks to everyone who responded.  I did try to apply for a new EIN and as we all thought, it was rejected so the old one is still active.  Yeah!  I am so glad this client is starting his  business back up as he is among my top 2 favorite clients.  He listens to and always asks advice before he does anything major that will effect him tax wise.  He is one of the few I work for that actually takes into account that although he may be paying someone 15.00 per hour that is not the true cost to him because of payroll taxes, work comp, ect...

I am truly looking forward to working for him again!

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