New requirement for businesses seeking tax ID numbers

Dentists who are purchasing or starting a practice or making a change to their business structure should be aware of a new IRS requirement. As of May 13, 2019, only individuals with a tax identification number — either a Social Security number or an individual taxpayer identification number — may request an employer identification number, according to the requirement. An EIN is a nine-digit tax identification number that identifies sole proprietors, corporations, partnerships and other business entities and is assigned for tax-filing and reporting purposes. The EIN is also known as a federal tax identification number.

The new requirement is intended to “provide greater security to the EIN process by requiring an individual to be the responsible party” and to prohibit “entities from using their own EINs to obtain additional EINs,” the IRS stated in the May 7 issue of the IRS Newswire.

Entities may apply for an EIN online or with the paper Form SS-4. 

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