When closing a small business, there are many things to consider. On a federal level, typically a business must file an annual return for the year it goes out of business. Depending on the business structure or whether the business had employees, there are a number of tax forms that typically must be filed with the IRS before a business is deemed closed by the federal government. Not to mention state tax requirements…..but once the fiscal responsibilities have been met and the entity has been formally dissolved, one step that is frequently overlooked is canceling the EIN.
Many business owners think that once all final tax filings have been made, the IRS will automatically close or discontinue the entity’s EIN, but just as the title of this article implies the EIN for the business is never discontinued, reassigned or reused. Regardless of whether or not an EIN was ever used, the number is PERMANENT. An EIN cannot be canceled by the IRS; however, the business account associated with the EIN may be closed. If the EIN is needed in the future, it will still belong to the business entity even after the account is closed.
To close a business account with the IRS, a written letter is required to be sent to: Internal Revenue Service, Cincinnati, OH 45999. The letter must state the reason for closing the account and include the EIN, the complete legal name of the entity, and the business address. If a copy of the EIN Assignment Notice is available, be sure to include it with your letter. For entities that are deemed liable for business taxes or have been notified that business tax returns are due, the appropriate tax returns will need to be filed before the EIN account can be closed. To be absolutely sure that all necessary filings have been made to close your business with local, state, and federal tax agencies, Harvard Business Services strongly suggests that you seek the assistance of a qualified tax professional.
There are 2 comments left for An EIN Number Lasts Forever…and Ever…and EverKen said: Saturday, February 3, 2018
I applied for an EIN in 2005 for a business that was a partnership, the partnership ended in 2010. I haven't done business since but wish to start it up again. Do I apply for a new EIN number as Sole Propreitor now or use the old number? Thanks.HBS Staff replied: Monday, February 5, 2018
Typically when starting a new venture with a new company, clients often obtain a brand new EIN.Nelly Mendel said: Thursday, November 16, 2017
Finally, my question was answered. Now, maybe you can answer this another question. Our corporation, which is non profit organization, is inactive. We are going to restate , Do I have penalties to pay to the Louisiana State revenue?HBS Staff replied: Friday, November 17, 2017
We are experts in Delaware companies and can't speak to a Louisiana corporation. Try getting in touch with the Lousiana Division of Corporations.