How to Cancel an EIN Number?

They tell you an EIN is vital for launching your enterprise on the right foot and eligibly running it afterward before you even know what an EIN is. And you start searching high and low for instructions on how to get an EIN. And what if you need to cancel an EIN number? Is it possible? Where do you need to apply for cancellation? What is the whole procedure? How much time will it take? You’ll find clear answers in our brief yet informative article. 

Understanding the EIN Number

For the start, an EIN stands for an Employer Identification Number, which is issued by the Internal Revenue Service (IRS) to make entities visible, distinguishable, and easy-to-trace for tax, governmental, and financial authorities. Also called a Federal Tax ID, an EIN is a unique nine-digit number that exclusively pertains to a single organization and can’t be shared or co-owned by several entities. 

Initially, EINs are issued for tax purposes to determine the company’s taxpayer status. Assigned only to legal entities, EINs function in the same way as Social Security Numbers for individuals. Besides, an EIN is a law requirement for a business to hire employees and pay any related taxes. Likewise, you won’t be able to open a separate bank account for your company unless it has an EIN. 

However, apart from so-to-say “marking” your enterprise for tax services, an EIN also offers a number of benefits to any legally formed venture: 

• It minimizes the risk of your identity theft since all your personal data are kept private while state bodies can easily find your enterprise by a simple number;
• An EIN is yet another proof that your company is a separate legal entity that is independent of you. As such, it further strengthens corporate veil protections and boosts up your overall business credibility and trustworthiness; 
• With the EIN, your organization will get better financial opportunities. Thus, entities with established business bank accounts have more chances to obtain business loans and credits for operational needs and future growth maintenance.

So, while an EIN is a must only for partnerships and corporations, it has a lot to offer to all business entity types. And a sole proprietorship or an LLC can get it the same way to make use of all the above-mentioned perks.

How to Cancel an EIN

Acquiring a tax ID number is a matter of a few simple steps. By applying online, you can obtain the number as soon as you fill it in and submit a digital form. Yet, it’s worth noting that an EIN is issued to your company for good. This one-of-a-kind number is permanent, and you can’t “get rid of it” or erase it. And it cannot be reassigned to any other company as well. 

At the same time, you might want to cancel your current EIN number for different reasons such as dissolving your business, retiring, transferring your ownership rights, or restructuring your company. Whatever the reason, you still won’t be able to deactivate the EIN. Yet, what you can do is close your company account with the IRS. If you are strong in your decision, you can close your IRS business account in three successive steps:

Upload an EIN Cancellation Letter

Normally, the letter is available in PDF and Word formats. So, you can fill it in by hand or type in the necessary info before printing. As for where to get it, this document has a standard form and content, hence, you’ll be able to find it among basic legal templates on one of the multiple legal websites. 

Submit the Letter to the Internal Revenue Service

There is no way to deliver the letter via fax or online. You can only send the signed original via mail. The address to direct your docs to is:

Internal Revenue Service, BMF Department Mail Stop 43 Cincinnati, OH 45999-023

If you’ve received a confirmation letter from the IRS when applying for an EIN, you need to attach this paper to your cancellation letter. Noteworthy, the IRS usually provides a reply confirming your EIN info update within the period of up to 45 days. 

To close the IRS account for tax-exempt companies that have no official exemption status or have never submitted corresponding reports, send the cancellation letter to the following address:

Internal Revenue Service, EO Entity Mail Stop 6273 Ogden, UT 84201

Call for the Confirmation if You Have No Reply

Should you get no feedback from the IRS within the specified 45-day period, you can send one more cancellation letter copy to the same IRS address. Just mark it as a second request. 

Cancellation Letter Content

One important thing to remember before filing a cancellation letter is that unless you pay all taxes your business owes and settle all the required tax returns, the IRS won’t close your business account. Once you have no overdue and open commitments to the IRS, you can proceed to fill in the cancellation letter template that should be printed on your business letterhead and typically covers the following:

• Full registered company name as stated in statutory documents;
• A valid EIN number;
• Complete business address or a physical company address;
• A detailed description of the reasons for closing your existing account;
• A copy of the EIN confirmation letter if you have one. 

Changing Your EIN Info 

If you rather need to amend your business EIN info than close the IRS account, you can do it this way:

• Swapping your registered company name for another moniker, simply fill in an appropriate form on the IRS website to let those changes appear in your IRS profile accordingly;
• Making changes in your business address, submit Form 8822-B;
• Modifying the legal structure of your enterprise to a more complex one, send Form 8832 to the IRS;
• Should any other crucial changes be made, inform them to your local IRS department.