The first step to creating a new company is the actual company formation.
The formation of a new business entity is the foundation upon which everything else is built—imagine it is the birth certificate for a company.
The next step is for you to apply for a Federal Tax ID Number from the IRS.
This Federal Tax ID Number (also referred to as an EIN) is necessary for every business that intends to operate in the United States; open a U.S. bank account, hire employees in the United States; work with other U.S. businesses; and, of course, file tax returns with the IRS.
Many people are under the impression that if the responsible party for the corporation or LLC has a U.S. address and valid Social Security Number (or Individual Taxpayer Identification Number ) then they will be able to easily obtain a Tax Identification Number online with the IRS.
Although this can sometimes be the case, there are several variables that can drastically delay Tax ID Number applications at the IRS.
When new business owners apply online for a Federal Tax ID Number with the IRS, it is not unusual for the following message to appear: “We apologize for the inconvenience, but based on the information provided, we are unable to provide you with an EIN through this online assistant.”
When this occurs, the application needs to be faxed or emailed to the IRS, and you must then wait 10-14 days for the IRS to issue your new Tax ID Number.
Some of the triggers that cause this error message are:
- A foreign address is listed on the EIN application.
- If the responsible party is a business with an EIN previously obtained through the IRS online portal. Companies that have an EIN number that starts with 20, 26, 27, 45, 46 or 47 can identify their EIN as a number issued online via the IRS.
- A foreign individual is listed as the responsible party of the application.
- In our specialist’s experience, 99% of applications with an individual ITIN on line number 7B require additional documents in order to process the application. The IRS will then require confirmation as well, such as the ITIN card or letter, to proceed.
- There was a previous company already formed in the same state, with the same company name and same responsible party, which never cancelled its EIN (by writing a letter to the IRS to terminate the EIN number).
Dealing with the IRS yourself can be frustrating. Sometimes, phoning the IRS help line with a simple question is preceded by a one-to-two-hour wait time.
Due to the demand for new tax numbers and too few customer service personnel at the IRS, people all over the world have turned to us for assistance obtaining a Federal Tax ID Number online.
In the last two years, Harvard’s EIN specialist has helped over 7,000 companies obtain Tax ID Numbers. She is an expert and has the process down to a science.
Twenty-five percent of the EIN’s we obtain are for international clients without Social Security Numbers. Contact us at 1-800-345-2677 for the easiest way to obtain your Federal Tax ID Number online, quickly and easily.