An EIN Number Lasts Forever…and Ever…and Ever
When you decide to close your business, quite a few items will fall on your plate all at once. For starters, you’ll need to close your bank accounts and pay any outstanding debts. On a federal level, a business typically must file an annual return for the year it goes out of business. Depending on the business structure and 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.
There’s also the matter of the EIN. One common misconception is that you’ll need to deactivate your EIN (employee identification number) once the business is closed, but that actually isn’t the case. In fact, once established, an EIN will last forever…and ever…and ever…
How Long Does an EIN Last?
Believe it or not, EINs do not expire and remain permanently tied to the entity once issued. Many business owners wrongfully assume that once all final tax filings have been made, the IRS will automatically discontinue or close an EIN, but just as the title of this article implies, a business’s EIN is never discontinued, reassigned, or reused. Regardless of whether or not an EIN was ever used, the number is permanent. The IRS cannot cancel EIN numbers; however, the business account associated with the EIN may be closed. This way, if the EIN is needed in the future, it will still belong to the business entity even after the account is closed.
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How to Check Your Inactive EIN
As we’ve established, your Federal Tax ID Number won’t go away once the business is closed. As such, you may encounter a scenario where you need access to an old EIN from a past business venture. It happens all the time where a business needs to close its doors for an extended period of time, only to return years later. In these scenarios, the business will need to use the same EIN.
Keep in mind that the IRS does not offer a public “EIN lookup” or online status checker, but there are still a few practical ways to confirm whether an EIN is active.
The easiest way to find the number is to check your emails and tax documents for any sign of your EIN. If that doesn’t help, you can also reach out to your registered agent, who may still have your EIN handy. If all else fails, you can always reach out to the IRS Business & Specialty Tax Line. For more information, you can read about recovering your lost EIN in our blog.
What Happens if You Don’t Close Your Business?
If you don’t properly close your business, it doesn’t simply “go away.” In many cases, it continues to exist on paper, and that can create ongoing legal, tax, and financial problems, even if you’ve ceased operations. If left active, you and your business could experience some of the following issues:
- You will continue to owe state fees. If your business is still active with the state, annual report fees will continue to accrue, and late fees will start to pile up.
- The IRS will still expect tax filings. Even if you made $0 in revenue, the IRS may still expect annual tax returns.
- You may lose liability protection. For LLCs and corporations, courts may view the business as non-compliant, and owners could become liable for debts.
How to Close a Business Account
To close a business account with the IRS, a written letter must be sent to:
Internal Revenue Service, Cincinnati, OH 45999.
The letter must state the reason for closing the account and include the federal identification number, 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.
Harvard Business Services, Inc. strongly suggests that you seek the assistance of a qualified tax professional when closing a business. Please reach out to us if you need help closing your company.
I'm not closing, just re-organizing. Do I need a new EIN?
We’ve already discussed that a business closing and reopening at a later date will use the same EIN, but what if that business undergoes a major change? Ultimately, the decision on whether you need a new EIN will be made by the IRS, but as a general rule, any time a business re-organizes it will need to change EINs. A few examples of business re-organization include:
- Changing from a corporation to another entity, like an LLC or Limited Partnership, or vice versa
- Incorporating in a new state, resulting in a new state charter
- Merging corporations, resulting in a new corporation
- Changing a sole proprietor to a partnership or other business entity like a corporation, LLC, etc.
- Changing a partnership to a sole proprietor or other business entity like a corporation, LLC, etc.
- Changes to a partnership, resulting in a new partnership (i.e., one partner out, a new partner in)
- Changes in business ownership that result in the original EIN applicant no longer maintaining ownership of the company
Aside from reorganizing a business, most other changes typically do not require a new EIN. Here are some examples of business readjustments that do not require you to change EINs:
- Changing the name of your business
- Changing your location or adding a new location
- Changing the way the entity is taxed (such as electing to be taxed as an S-corporation)
- A partnership or corporation declares bankruptcy
These lists are not meant to cover all situations, but do cover a number of common changes we see every day. If you still wonder whether or not you need to change EINs, check out this article on IRS.gov, Do You Need a New EIN?, or feel free to contact us for more information.
Form or Dissolve a Business Today
At the end of the day, you cannot deactivate an EIN. You can, however, close the business associated with the EIN. If you’re ready to follow through with the business cancellation process, you can learn more about closing a Delaware business on our website. Instead, if you’re ready to form a new Delaware LLC, Harvard Business Services, Inc. is ready to get started!
Get answers for all your business needs
Not sure what’s right for your company? Speak directly with our specialists and get clarity before you make your next move.
Talk to an expert*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
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There are 8 comments left for An EIN Number Lasts Forever…and Ever…and Ever
Justin Ray said: Thursday, April 12, 2018Can I use my win and change my company name and address with the service you provide?
HBS Staff replied: Thursday, April 12, 2018We can help you change your company's name with a Certificate of Amendment but in order to change your address with the IRS, you must contact the IRS directly. Here is a bit more information:
https://www.delawareinc.com/blog/change-your-business-name-with-the-irs/
Ken 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, 2018Typically when starting a new venture with a new company, clients often obtain a brand new EIN.
Nelly Mendel said: Thursday, November 16, 2017Finally, 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, 2017We are experts in Delaware companies and can't speak to a Louisiana corporation. Try getting in touch with the Lousiana Division of Corporations.
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