What Exactly is an EIN?
An EIN, sometimes called a Federal Employer Identification Number (FEIN), is a nine-digit number that the Internal Revenue Service (IRS) assigns to your business. This number is crucial for several reasons:
Tax Reporting: You’ll need an EIN to file your federal taxes. It helps the IRS keep track of your business’s tax-related matters.
Business Identification: The EIN serves as a unique identifier for your business, much like a Social Security Number does for individuals.
Opening a Business Bank Account: Most banks require an EIN to open a business bank account, which is vital for keeping your personal and business finances separate.
Hiring Employees: If you’re planning to hire employees, you’ll need an EIN for employment tax reports and other related documents.
Establishing Payroll: Setting up a payroll system to pay employees also requires an EIN for tax withholding and reporting purposes.
Applying for Permits and Licenses: Some local and state agencies require an EIN to process applications for business licenses and permits.
Building Business Credit: With an EIN, you can start building a credit profile for your business, which can be helpful when applying for business loans or lines of credit.
Entering Into Contracts: An EIN can make it easier to enter into business contracts, reinforcing that your business is a separate legal entity.
What is a CP-575 Letter?
When you first receive your EIN from the IRS, they’ll send you a Form CP-575. This letter confirms your EIN and includes important details like your business name and the tax forms your company is expected to file. It’s a crucial document, especially when setting up payroll systems or opening new bank accounts, so make sure to keep it safe!
Misplaced Your CP-575 Letter? Here’s What to Do:
If you can’t find your CP-575 letter, don’t worry—you can request a 147-C Letter, which is essentially a verification letter confirming your EIN and other business details. Here’s how you can request it:
Call the IRS Business and Specialty Tax Line at 1-800-829-4933.
Press option 1 for English
Press option 1 for Employer Identification Numbers
Press option 3 for existing EIN inquiries
Explain to the IRS agent that you need a 147-C Letter for your LLC.
Verify your identity with the agent by answering a few security questions.
Choose how to receive your 147-C Letter.
By mail: 10-14 business day delivery
By fax: immediate receipt
Make sure to have access to a private and secure fax machine.
If you do not have a fax number, you can have the form faxed directly to Collective, our fax number is +1 650-275-4240 (it is a private and secure fax line).
Example CP 575 Letter:
Example Letter 147C:
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.