EIN Guide: What Is an EIN, Who Needs One, How to Apply, and Why Applications Get Rejected

What Is an EIN?

An Employer Identification Number (EIN), also called a Federal Tax Identification Number, is a 9-digit number issued by the IRS to identify a business entity for federal tax purposes. It is formatted XX-XXXXXXX and functions for a business the way a Social Security Number functions for an individual: it is the number the IRS, banks, and other institutions use to track that entity's tax filings, payroll, and financial accounts.

Despite the name, an EIN is not only for businesses with employees. The IRS assigns EINs to sole proprietors, single-member and multi-member LLCs, corporations, partnerships, nonprofits, estates, trusts, and certain other entities, whenever a federal tax filing, banking, or reporting requirement calls for one. An LLC with zero employees can still need an EIN — and in many cases, such as a foreign-owned single-member LLC, is required to have one regardless of income or activity.

An EIN, once issued, is permanent. It is never reused for a different entity, even if the original business closes or the EIN is never actively used again. It identifies that specific legal entity for as long as records exist.

EIN vs. SSN vs. ITIN: What Is the Difference?

Quick answer: An EIN identifies a business entity, an SSN identifies a U.S. citizen or authorized worker, and an ITIN identifies an individual with a U.S. tax obligation who is not eligible for an SSN. Your LLC's EIN does not replace or cover your personal ITIN requirement, and vice versa.

Foreign founders frequently assume that getting an EIN means they are fully compliant, or that an EIN somehow substitutes for a personal ITIN. Neither is true. The EIN identifies the LLC. If you, the owner, separately have a personal U.S. tax filing requirement — for example, filing Form 1040-NR because the LLC has effectively connected income, or filing Form 5472 as the foreign owner of a disregarded entity — you need your own ITIN in addition to the LLC's EIN. See our full ITIN guide for that side of the process.

Who Needs an EIN?

Quick answer: Any LLC with more than one member, any business that hires employees, elects corporate tax treatment, or is foreign-owned generally needs an EIN. Most banks also require one to open a business account, even for single-member LLCs with no employees.

• Multi-member LLCs. An LLC with two or more members is taxed as a partnership by default and must have an EIN to file Form 1065 and issue Schedule K-1s to each member.
• Businesses with employees. Any entity that pays wages needs an EIN for payroll tax withholding, reporting, and remittance.
• LLCs electing corporate taxation. If an LLC elects to be taxed as a C corporation or S corporation, it needs an EIN to file the corresponding Form 1120 or Form 1120-S.
• Foreign-owned single-member LLCs. Even with a single foreign owner and zero U.S. activity, the LLC needs an EIN to file the mandatory Form 5472 with a pro forma Form 1120 every year it exists.
• Businesses opening a U.S. bank account. Nearly every U.S. bank, and most payment platforms such as Stripe or PayPal, require an EIN before opening a business account, regardless of the entity's size or activity level.
• Entities that file excise, alcohol, tobacco, or firearms tax returns. These specialized federal filings require an EIN regardless of entity type.
• Trusts, estates, and certain retirement plans. These need their own EIN separate from the individual who created or administers them.
• Businesses that change structure. Incorporating a sole proprietorship, converting to a partnership, or taking on a second owner generally requires a new EIN, since the EIN is tied to a specific legal entity structure, not just a business name.

A single-member LLC with no employees, no corporate election, and a U.S. owner who plans to report the LLC's activity on their personal return may not be legally required to get an EIN for tax purposes — but in practice, almost every bank will still require one to open an account, which is why most single-member LLC owners apply for one regardless.

What Is the Procedure to Get an EIN?

Quick answer: Confirm the LLC needs an EIN, identify the true individual responsible party, complete Form SS-4 (or the online equivalent), choose the correct application method for your situation, and keep the resulting confirmation letter with your permanent business records.

1. Confirm the entity legally exists first. The EIN application asks for your LLC's formation date and state, so your LLC should generally already be approved by the state before you apply.
2. Identify the responsible party. This must be a real individual — the true owner, managing member, or principal officer — not the LLC itself and not a registered agent or formation company acting as a placeholder.
3. Complete Form SS-4 with the legal business name (matching your state formation documents exactly), business address, entity type, reason for applying, expected number of employees, and principal business activity.
4. Choose your application method. If the responsible party has an SSN or ITIN and is applying from within the United States, the online EIN Assistant is fastest. If the responsible party has no SSN or ITIN, online is not available, and you must apply by fax, mail, or the IRS international phone line.
5. Submit the application. Online applications are processed in the same session. Fax applications generally return an EIN within about 4 to 7 business days. Mailed applications typically take 4 to 6 weeks, longer for applicants outside the United States.
6. Receive your CP 575 confirmation letter. This is the IRS's official written confirmation of the EIN, the entity's legal name, and the date it was assigned. Keep it permanently — banks and other institutions frequently ask for a copy.
7. Keep responsible-party and address information current. If the responsible party or address changes later, the IRS requires this to be reported within 60 days using Form 8822-B.

Applying Online vs. Fax vs. Mail vs. Phone

Quick answer: The online EIN Assistant is fastest but only available to responsible parties with an SSN or ITIN applying from a U.S. location. Everyone else — including most foreign owners — applies by fax, mail, or the IRS international phone line.

Foreign responsible parties without an SSN or ITIN should not attempt the online tool at all — the system will reject the application outright with a message stating the applicant is not eligible to apply online. This is standard IRS policy, not a technical glitch, and is stated directly in IRS Publication 1635 and Publication 519.

Who Is the "Responsible Party," and Why Does It Matter?

Quick answer: The responsible party is the specific individual who ultimately owns, controls, or has authority over the entity's funds and assets. The IRS requires a real natural person here, and using a nominee instead of the true owner is treated as a compliance violation that can lead to the EIN being flagged or revoked.

This single field causes more long-term problems than almost any other part of Form SS-4. The IRS defines the responsible party as the person who exercises ultimate effective control over the entity — not a title, not a service provider, and not the LLC itself. For a single-member LLC, this is almost always the sole owner. For a multi-member LLC, it is whichever member or manager has that level of control; if more than one person qualifies, the LLC can choose which one to list.

A recurring mistake among new founders working with formation services is allowing the registered agent or filing company to list itself, or one of its staff, as the responsible party "for convenience." The IRS treats this as a nominee arrangement. If discovered, it can result in the EIN being revoked or flagged for review, and it complicates every future filing tied to that EIN, since the entity's own true owner is not on record. The correct responsible party is you, the actual owner — not your formation service, not your registered agent, and not your accountant, unless one of them genuinely holds that level of control.

If the responsible party ever changes — for example, ownership transfers to a new person — the entity must report this to the IRS within 60 days using Form 8822-B, Change of Address or Responsible Party.

Documents and Information Needed for an EIN Application

Quick answer: You need your LLC's legal name and formation details, the responsible party's identifying information (SSN, ITIN, or foreign identification), the business address, entity type, and a clear reason for applying.

• Legal business name and trade name (if any). Must match your state-approved formation documents exactly, including punctuation and suffixes like "LLC."
• Formation date and state. The date your LLC was legally formed and the state where it was organized.
• Responsible party's full legal name and identifying number. An SSN or ITIN if the responsible party has one; otherwise "Foreign" or "N/A" per the SS-4 instructions, along with a foreign passport number where requested.
• Mailing address and physical business address. A P.O. box alone is generally not sufficient for the physical address field; many foreign owners use a registered agent or virtual address service to satisfy this requirement.
• Entity type. Sole proprietorship, single-member LLC, multi-member LLC (partnership), corporation, or another recognized structure — and, for a corporation, which return form it will file (1120 or 1120-S).
• Reason for applying. Starting a new business, hiring employees, opening a bank account, banking or compliance requirement, or another accurate reason. A vague or incorrect reason is a common source of follow-up requests from the IRS.
• Principal business activity and expected number of employees. A short, accurate description of what the business does, and a realistic employee estimate for the first 12 months.

Common Reasons EIN Applications Get Rejected or Delayed

Quick answer: Most EIN delays trace back to a business name that does not exactly match state records, an incorrect entity type, a missing or mismatched responsible-party SSN/ITIN, or trying to list a company instead of a real individual as the responsible party.

• Name mismatch. Even small differences between the name on Form SS-4 and the name on file with the state — a missing comma, a different capitalization of "LLC" versus "L.L.C." — can cause the IRS to flag the application.
• Wrong entity type selected. Choosing "corporation" for what is actually an LLC, or checking the wrong box for single-member versus multi-member, misclassifies the entity from the start and can require a lengthy correction process later.
• Listing a company, not a person, as the responsible party. The responsible party field must be a natural person's name and identifying number, never another EIN or an entity name.
• Missing or invalid SSN/ITIN entry for a domestic applicant. If the responsible party has an SSN or ITIN, it must be entered correctly; typos here are one of the single most common rejection triggers.
• Blank or unclear line 7b for foreign applicants. Foreign responsible parties without an SSN or ITIN should write "Foreign" or "N/A," not leave the field blank, which can cause the fax or mailed application to be returned as incomplete.
• Attempting the online tool without an SSN or ITIN. This does not result in a slow rejection — the online system blocks the attempt immediately and states the applicant is not eligible to apply online.
• No U.S. mailing or physical address on file. Many foreign applicants stall here; a registered agent or virtual mailbox address is commonly used to satisfy this requirement legitimately.
• Requesting a second EIN for the same responsible party on the same day. The IRS limits each responsible party to one EIN per calendar day, regardless of how many entities that person owns.

How Foreign Owners Without an SSN or ITIN Get an EIN

Quick answer: Foreign owners do not need an SSN or ITIN to get an EIN. They apply by fax or mail using Form SS-4, or by calling the IRS international phone line, writing "Foreign" or "N/A" on the SSN/ITIN line and providing a passport number as identification instead.

This is one of the most common misconceptions among non-U.S. founders: the assumption that an ITIN must come first, before the EIN can be requested. In reality, the two are independent. IRS guidance explicitly states that foreign individuals are not required to have an ITIN in order to receive an EIN. The correct order in practice is usually the reverse — get the EIN first, since it is faster and does not require a personal U.S. tax identification number at all, and only pursue the ITIN afterward once a genuine personal filing requirement exists.

The practical route for a foreign responsible party is:

1. Complete Form SS-4, entering "Foreign" or "N/A" on the line requesting the responsible party's SSN or ITIN, and providing the passport number and country of issuance where the form requests identifying information.
2. Do not attempt the online EIN Assistant — it is not available to applicants without an SSN or ITIN and will reject the attempt on the spot.
3. Submit the completed form by fax to the IRS's international fax number, by mail to the IRS EIN International Operation in Cincinnati, Ohio, or by calling the IRS international EIN phone line if you are located outside the United States.
4. Provide a U.S. business address on the application. Since most foreign owners do not have one, a registered agent address or a legitimate U.S. virtual mailbox is commonly used to satisfy this field.
5. Expect a longer timeline than the instant online process: typically several business days by fax, and several weeks by mail.

Language and formatting are genuine practical obstacles here. The 18-line SS-4 form must be filled out in English, matched precisely to the entity's state formation documents, and submitted through a channel the IRS does not confirm receipt of automatically — which is why many foreign founders choose to have a professional service prepare and submit the fax or mail package on their behalf rather than doing it entirely themselves.

How the EIN Connects to Form 5472 for Foreign-Owned LLCs

Quick answer: A foreign-owned single-member U.S. LLC must file Form 5472 with a pro forma Form 1120 every year it exists, even with zero income or activity, and the EIN is the number that identifies the LLC on that filing.

Form 5472 is an information return, not an income tax return. Its purpose is to give the IRS visibility into transactions between a foreign-owned disregarded entity and its owner — capital contributions, distributions, loans, and payments for services. The requirement to file exists because of foreign ownership itself, not because the LLC earned money. Missing this filing carries a steep penalty of $25,000 per form, per year, which makes getting the EIN in place early, right after formation, an urgent step rather than something to postpone. Note that Form 5472 uses the LLC's EIN, while any personal filing tied to the owner — such as Form 1040-NR, if the LLC generates effectively connected income — uses the owner's own ITIN. The two numbers serve two different filings and are not interchangeable.

What Happens After You Get Your EIN?

Quick answer: The IRS sends a CP 575 confirmation letter with your EIN and legal business name. Keep it permanently, since banks, payment processors, and future tax filings will regularly ask for a copy.

Once an EIN is assigned, the IRS mails (or, for online applications, immediately displays and later mails) a CP 575 notice confirming the EIN, the legal name of the entity, and the date of assignment. This letter is the closest thing to an official "certificate" for your EIN, and it is frequently required by banks when opening a business account, by payment processors such as Stripe or PayPal during verification, and by accountants preparing your first tax filings. Store both a physical and digital copy with your permanent company records, alongside your Articles of Organization and Operating Agreement.

Updating, Recovering, or Closing an EIN

Quick answer: Report a change of responsible party or address with Form 8822-B within 60 days, retrieve a lost EIN by calling the IRS Business & Specialty Tax Line for a 147C letter, and close an EIN account with a written request once all final returns are filed — the number itself is never reused.

• Updating responsible party or address. File Form 8822-B within 60 days of any change. Skipping this step can create mismatches that affect future correspondence and filings tied to the EIN.
• Lost or misplaced EIN. Check any prior tax return, bank application, or IRS notice referencing the number first. If it cannot be located anywhere, call the IRS Business & Specialty Tax Line to request a 147C letter, which serves as an official replacement confirmation.
• Closing an EIN account. The IRS does not delete or reassign an EIN once issued — it remains permanently associated with that entity, even after the business closes. To close the account, send the IRS a letter including the EIN, the entity's complete legal name and address, and the reason for closing, after all final returns have been filed.

Common EIN Myths for LLC Owners

Quick answer: The most damaging EIN myths are that state LLC approval automatically issues an EIN, that an EIN requires an ITIN first, and that an EIN alone makes a foreign-owned LLC fully tax-compliant. None of these are accurate.

• Myth: "My state approved my LLC, so I automatically have an EIN." These are two entirely separate agencies and two separate applications. The state confirms your LLC exists; the EIN is a federal number you must request afterward, directly from the IRS.
• Myth: "I need an ITIN before I can get an EIN." This is backward. Foreign individuals do not need an ITIN to get an EIN. In most cases, the EIN comes first, since it is faster and does not depend on a personal U.S. tax number at all.
• Myth: "Getting an EIN means my LLC is fully tax-compliant." An EIN is one identifier used across several separate obligations — annual state reports, Form 5472 for foreign-owned LLCs, and any personal returns tied to the owner's own ITIN. Having the EIN does not, by itself, satisfy any of those other requirements.
• Myth: "My registered agent can be the responsible party to keep things simple." The IRS requires the true owner or controller of the entity, not a convenient placeholder. Listing a nominee is a compliance issue, not a shortcut.
• Myth: "I have to pay the IRS to get an EIN." The IRS issues EINs at no charge. Any fee you pay is for an optional professional service preparing and submitting the application on your behalf, not a government fee.
• Myth: "One EIN covers all my businesses." Each distinct legal entity generally needs its own EIN. Owning three separate LLCs, even with the same responsible party, typically means three separate EINs.

Does Your LLC Also Need a State Tax ID?

Quick answer: An EIN is a federal number from the IRS. Many states separately require their own state tax ID or sales tax permit for LLCs that sell taxable goods or services, hire employees, or owe state-level business tax — and this is a different registration from the federal EIN.

It is easy to assume that a single number covers every level of government, but U.S. tax administration is split between federal and state systems. Your EIN satisfies federal requirements: opening a business bank account, filing federal returns like Form 1120 or Form 5472, and federal payroll tax. Separately, many states require their own registration — sometimes called a state tax ID, a sales and use tax permit, or a state employer account number — if your LLC sells taxable goods or services within that state, has employees working there, or owes state income or franchise tax. Requirements vary significantly by state, so check the specific state guide relevant to where your LLC operates for its exact rules.

Is There a Fee to Get an EIN?

Quick answer: The IRS does not charge a fee for Form SS-4 or the online EIN Assistant. Applying directly with the IRS is entirely free, regardless of application method.

This is worth stating plainly because a number of third-party websites are designed to look like the official IRS EIN application and charge a fee simply to submit the same free form on your behalf, often without disclosing clearly that the government service itself costs nothing. Applying directly through IRS.gov, by fax, by mail, or by phone never carries a government fee. Where a legitimate fee applies is when you choose to pay a CAA, accountant, or formation service to prepare the SS-4, handle a foreign responsible party's fax or mail submission, and follow up with the IRS on your behalf — a paid convenience service, not a government charge.

What Is the Best Way to Get Your EIN Approved?

Quick answer: Match your legal business name exactly to your state formation documents, correctly identify the true individual responsible party, select the accurate entity type and reason for applying, and use the online tool only if you have an SSN or ITIN — otherwise go straight to fax or mail.

• Get your state LLC approval first. Apply for the EIN only after your Articles of Organization are approved, so the formation date and legal name on Form SS-4 match your official state record exactly.
• Name the real responsible party. Never let a formation service or registered agent list itself as a placeholder owner — this is treated as a compliance violation, not a convenience.
• Double-check the entity type and reason for applying. These two fields drive how the IRS classifies and taxes the entity going forward, and correcting them later is far more work than getting them right the first time.
• Use the correct application channel for your situation. Domestic applicants with an SSN or ITIN should use the online EIN Assistant for an instant number. Foreign applicants without one should go directly to fax, mail, or the international phone line rather than wasting time on a system that will reject them outright.
• Enter "Foreign" or "N/A," never leave the SSN/ITIN field blank, if you are a foreign responsible party. A blank field on a mailed or faxed form is a common, entirely avoidable cause of a returned application.
• Keep the CP 575 letter permanently and update the IRS with Form 8822-B any time the responsible party or address changes.
• Have a professional review the package before submission if you are applying from abroad without an SSN or ITIN, since name-matching, entity classification, and the responsible-party rule are where nearly all delays originate.

EIN Frequently Asked Questions

Official IRS EIN Source

Always verify current requirements directly with the IRS before applying: Employer Identification Number on IRS.gov and About Form SS-4 on IRS.gov.