The Process of Verifying an EIN
An Employer Identification Number (EIN) is a critical financial element of a business. An EIN is required to file credit applications, tax returns, and state licenses and permits. Without this number, a business will stall, unable to grow or perform necessary activities. Like an individual’s social security number (SSN), an EIN is a nine-digit number provided by the Internal Revenue Service (IRS). This number is private, so in order to verify an EIN, one must have a certain amount of authority. If an individual is not an authorized representative of the company in question, then he or she must receive authorization prior to EIN verification.
Calling the IRS
The IRS is responsible for providing and maintaining records for EINs. If an individual is authorized to verify an EIN, then he or she may call the IRS to get this information. Usually, this is relevant is a company’s EIN is lost or misplaced. Authorized individuals able to act on behalf of the company in this way may include:
- Sole proprietor
- Corporate officer
- Estate executor
To call the IRS, an authorized individual may call the Business and Specialty Tax Line. This line is open Monday through Friday, from 7 AM to 7 PM EST. The number is (800) 829-4933.
In order to verify an EIN for a business, one must be an authorized individual. However, this rule does not apply to nonprofit entities. Nonprofits are required to maintain public records. This means that anyone can access this information from the IRS. Similarly, if one requests the EIN from a nonprofit, by law the nonprofit must provide it.
One can look up a nonprofit organization on the Exempt Organization page on the IRS website. This site will verify EINs of nonprofits but will also reveal if the organization is in good standing with the IRS. What does good standing mean? A company in good standing is current on tax returns and filings. This site will also show if the organization has had its nonprofit status taken away.
Other Ways to Verify
A non-authorized person requesting an EIN must have a legitimate reason to ask for it. An example of a legitimate reason would be a loan officer needing to verify a company’s EIN for a loan. This loan officer would need authorization in the form of a signed credit application that includes the EIN, company name, address, and officer information. This kind of verification comes with fees.
An investor or business partner can request that a company verify its EIN by providing previous tax returns. While private companies do not have to provide this information, it is often in their best interest to do so when negotiating. If concerned about the company’s financial health, potential partners or investors can always conduct a Dun & Bradstreet search.
An employee can see his or her company’s EIN on their paycheck or W-2. It is important that these two numbers match. If they do not, the IRS can reject a tax return with an incorrect EIN. If this occurs, then the payroll representative will need to verify the EIN number so that payroll is properly conducted and recorded.