Obtain a Federal Employer Identification Number for Your LLC
by Richard Keyt, Arizona LLC, corporate and business attorney
I recommend without exception that all Arizona LLCs obtain a a federal employer identification number. One of the most important formalities of Arizona law that all Arizona LLCs must comply with is that the company open a bank account in its name and that all of the LLC’s income and expenses go through its bank account. To open a bank account, a manager of a manager managed LLC or a member of a member managed LLC must deliver a copy of the LLC’s Articles of Organization to the bank and give the bank the company’s federal employer ID number (EIN). If the LLC does not have an EIN, then the bank will require the manger or member’s social security number, a bad thing for two reasons.
In this day of rampant identity theft, you do not want to give anybody your social security number unless it is absolutely necessary. The more people and businesses that have your SSAN, the greater the risk that somebody might steal your SSAN. There is no reason to give the bank your SSAN because it is very easy to get a federal employer identification number for the company.
The company should apply for an EIN early enough to have its number to open a bank account, file a tax return or make a tax deposit. If the company will have employees and pay wages, it must file payroll tax returns and pay payroll taxes using the ID number. A company obtains a federal ID number by completing IRS Form SS-4, Application for Employer Identification Number, and filing it with the Internal Revenue Service. See also the Instructions for Form SS-4 and IRS Publication 1635 (pdf), Understanding Your EIN – Employer Identification Number.
Use the IRS’ Easy Online EIN Wizard to Get Your EIN in a Few Minutes
You may also obtain a federal EIN online in a matter of minutes from the IRS website. After answering a series of questions about the company online, the IRS’ system will immediately issue an EIN. Online EINs are available 24/7 without the need to file any paper document with the IRS. The online EIN is a provisional EIN, but it will be the permanent federal employer identification number for your business unless voided by the IRS. The IRS may void an EIN obtained online if : (i) the name and social security number of the principal officer do not match Social Security Administration records, or (ii) the business has already been assigned an EIN. Keep a record of your application for an EIN. Be sure to print your SS-4 application after the EIN is assigned and keep a paper copy for your records. You can do this by clicking the “Print Form” button after receiving your EIN.
The online issued EIN is the LLC’s permanent number and can be used immediately for most of of its business needs, including opening a bank account, applying for business licenses, and filing a tax return by mail. However, no matter how you apply (phone, fax, mail, or online), it will take up to two weeks before the EIN becomes part of the IRS’ permanent records. The company must wait until this occurs before filing an electronic return, making an electronic payment, or passing an IRS Taxpayer Identification Number matching program.
For more about the IRS’ online EIN wizard, see its “Online EIN Frequently Asked Questions.”
Telephone Method of Obtaining an EIN
You can get an EIN over the phone by calling the Tele-TIN phone number for your state, which for Arizona entities is 1-800-829-4933. Before calling the IRS, fill in the IRS Form SS-4 as best you can because the IRS may ask you to refer to it while on the phone and may ask that you sign and mail or fax a copy of the form to the IRS within 24 hours. The person making the call must be authorized to sign the form or be an authorized designee.
Applications for a federal EIN for LLCs must provide the following information in the online Form SS-4: (i) the LLCs exact legal name in box 1 ending with LLC without punctuation, (ii) the type of entity for tax purposes in box 8a (i.e., will the LLC be taxed as a partnership, sole proprietorship, or corporation), and (iii) type the words single or multi member LLC in box 8a on the line called Other, but do not check the Other radio button.
Third parties may also request EINs via the internet on behalf of a taxpayer. A third party who obtains an EIN for another party must retain a completed copy of the IRS Form SS-4 signed by the taxpayer and the signed statement authorizing the third party to file the online application.
The Fax Method
If you prefer, you can fax a completed Form SS-4 to the appropriate service center (215-516-3990 for Arizona), and they will respond with a return fax in about one week. If you do not include a return fax number, it will take about two weeks. If you apply by mail, send your completed Form SS-4 at least four to five weeks before you need your EIN.
Note for Single Member LLCs: A single-member LLC that intends to be taxed as a sole proprietorship does not need an EIN and generally should not file IRS Form SS-4. Generally, the LLC should use the name and EIN of its owner for all federal tax purposes. However, the reporting and payment of employment taxes for employees of the LLC may be made using the name and EIN of either the owner or the LLC. If the LLC-applicant indicates in box 13 of IRS Form SS-4 that it has or expects to have employees the IRS will assign the single-member LLC its own EIN.