When to Change Your Business EIN, Former IRS, Tax Help

Generally, businesses need a new EIN when their ownership or structure has changed. Although changing the name of your business does not require you to obtain a new EIN, you may wish to visit the Business Name Change page to find out what actions are required if you change the name of your business.

The information below provides answers to frequently asked questions about changing your EIN.

If, after reading the information below, you find that you need an EIN, please see How to Apply for an EIN

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Sole Proprietors

You will be required to obtain a new EIN if any of the following statements are true.

• You are subject to a bankruptcy proceeding.

• You incorporate.

• You take in partners and operate as a partnership.

• You purchase or inherit an existing business that you operate as a sole proprietorship.

You will not be required to obtain a new EIN if any of the following statements are true.

• You change the name of your business.

• You change your location and/or add other locations.

• You operate multiple businesses.

Corporations

You will be required to obtain a new EIN if any of the following statements are true.

• A corporation receives a new charter from the secretary of state.

• You are a subsidiary of a corporation using the parent’s EIN or you become a subsidiary of a corporation.

• You change to a partnership or a sole proprietorship.

• A new corporation is created after a statutory merger.

You will not be required to obtain a new EIN if any of the following statements are true.

• You are a division of a corporation.

• The surviving corporation uses the existing EIN after a corporate merger.

• A corporation declares bankruptcy.

• The corporate name or location changes.

• A corporation chooses to be taxed as an S corporation.

• Reorganization of a corporation changes only the identity or place.

• Conversion at the state level with business structure remaining unchanged.

Partnerships

You will be required to obtain a new EIN if any of the following statements are true.

• You incorporate.

• Your partnership is taken over by one of the partners and is operated as a sole proprietorship.

• You end an old partnership and begin a new one.

You will not be required to obtain a new EIN if any of the following statements are true.

• The partnership declares bankruptcy.

• The partnership name changes.

• You change the location of the partnership or add other locations.

• A new partnership is formed as a result of the termination of a partnership under IRC section 708(b)(1)(B).

• 50 percent or more of the ownership of the partnership (measured by interests in capital and profits) changes hands within a twelve-month period (terminated partnerships under Reg. 301.6109-1).

Limited Liability Company (LLC)

An LLC is an entity created by state statute.

The IRS did not create a new tax classification for the LLC when it was created by the states; instead IRS uses the tax entity classifications it has always had for business taxpayers: corporation, partnership, or disregarded as an entity separate from its owner, referred to as a “disregarded entity.”

An LLC is always classified by the IRS as one of these types of taxable entities.

If a “disregarded entity” is owned by an individual, it is treated as a sole proprietor. If the “disregarded entity” is owned any any other entity, it is treated as a branch or division of its owner.

Changes affecting Single Member LLCs with Employees

For wages paid on or after January 1, 2009, single member/single owner LLCs that have not elected to be treated as corporations may be required to change the way they report and pay federal employment taxes and wage payments and certain federal excise taxes.

On Aug. 16, 2007, changes to Treasury Regulation Section 301.7701-2 were issued. The new regulations state that the LLC, not its single owner, will be responsible for filing and paying all employment taxes on wages paid on or after January 1, 2009.

These regulations also state that for certain excise taxes, the LLC, not its single owner, will be responsible for liabilities imposed and actions first required or permitted in periods beginning on or after January 1, 2008.

If a single member LLC has been filing and paying employment taxes under the name and EIN of the owner, and no EIN was previously assigned to the LLC, a new EIN will be required for wages paid on or after January 1, 2009.

If a single member LLC has been filing and paying excise taxes under the name and EIN of the owner and no EIN was previously assigned to the LLC, a new EIN will be required for certain excise tax liabilities imposed and actions first required or permitted in periods beginning on or after January 1, 2008.

The following examples may assist in determining if a new EIN is required:

• If the primary name on the account is John Doe, a new EIN will be required.

• If the primary name on the account is John Doe and the second name line is Doe Plumbing (which was organized as an LLC under state law), a new EIN is required.

• If the primary name on the account is Doe Plumbing LLC, a new EIN will not be required.

You will be required to obtain a new EIN if any of the following statements are true.

• A new LLC with more than one owner (Multi-member LLC) is formed under state law.

• A new LLC with one owner (Single Member LLC) is formed under state law and chooses to be taxed as a corporation or an S corporation.

• A new LLC with one owner (Single Member LLC) is formed under state law, and has an excise tax filing requirement for tax periods beginning on or after January 1, 2008 or an employment tax filing requirement for wages paid on or after January 1, 2009.

You will not be required to obtain a new EIN if any of the following statements are true.

• You report income tax as a branch or division of a corporation or other entity, and the LLC has no employees or excise tax liability.

• An existing partnership converts to an LLC classified as a partnership.

• The LLC name or location changes.

• An LLC that already has an EIN chooses to be taxed as a corporation or as an S corporation.

• A new LLC with one owner (single member LLC) is formed under state law, does not choose to be taxed as a corporation or S corporation, and has no employees or excise tax liability.

When to Change Your Business EIN, Former IRS, Tax Help, IRS Tax Consultant