Multiple EIN Confusion Checklist
Understanding Multiple EIN Confusion
Duplicate EIN confusion occurs when a business owner holds two or more Employer
Identification Numbers, and the IRS records fail to clarify which number serves as the primary identifier or which business activity corresponds to each number. This situation typically begins when someone applies for a second EIN without realizing they already possess one, or when they intentionally maintain separate numbers but neglect to inform the IRS how the businesses relate to each other.
Multiple EINs with the same business issues escalate faster than other tax problems because the IRS computer matching systems flag duplicate filings, conflicting ownership claims, or misaligned income reports across multiple EINs. These automated flags often trigger notices or inquiries before you realize a problem exists.
A common misconception exists that having multiple EINs is always wrong or that the IRS will automatically consolidate them. Each business entity should have only one EIN for the same business.
Who Should Use This Guide
This guide applies to you if you have applied for or currently hold more than one Employer
Identification Number. Consult this information if you are unsure whether your business structure requires one number or multiple numbers, if you have received an IRS notice referring to multiple numbers on your account, or if you own a sole proprietorship, partnership, LLC, S corporation, or C corporation and have created additional numbers over time.
Individual filers with only a Social Security number and no EIN do not need this guide. Business owners who have legitimately closed their operations and already notified the IRS in writing should not use this resource.
Critical Steps to Resolve Multiple EIN Issues
Locate and verify all numbers
1. Begin by searching your business records, past tax returns, bank account paperwork, and payroll records for every Employer Identification Number you have applied for or been assigned.
2. Recording the date you applied for each number and the business name or activity listed on the application provides essential documentation.
3. Contact the IRS Business and Specialty Tax Line at 800-829-4933 to ask which numbers are currently linked to your name or business.
4. Identifying the legal structure of each business tied to each number is critical because the IRS uses legal structure to determine whether multiple numbers are necessary or redundant.
Viewing all EINs linked to your Social Security number through the IRS Business Tax Account online portal is not possible. You must call the IRS directly to obtain this information.
Review tax filing history
Pull copies of every Form 1065, Form 1120-S, Form 1120, Form 941, Form 940, Form 990, or
Schedule C filed under each number for the past three to five years. Review these returns carefully to identify overlapping business descriptions, income amounts, or activity periods.
These overlaps suggest two numbers are being used for the same business.
Document why each number exists and how the businesses differ. Write a clear explanation for each number describing the business activity, legal structure, ownership, start date, and how it differs from other businesses you own. This explanation will become your reference point if the
IRS asks questions.
How to Close an EIN with the IRS
If you confirm that one or more numbers are no longer in use or represent the same business as another number, you must close the inactive account. The IRS cannot cancel or consolidate your Employer Identification Number, but the agency can deactivate your account.
Once the IRS assigns an EIN to a business entity, it becomes that entity’s permanent federal taxpayer identification number. You can only deactivate accounts, not merge or transfer numbers between businesses.
Deactivation procedure
To deactivate your number, send a letter to the Internal Revenue Service, Cincinnati, OH 45999
that includes
- Your entity’s complete legal name
- The Employer Identification Number
- The business address
- Your reason for closing the account
- A copy of your EIN assignment notice (CP 575) if available
Corporations that adopt a resolution to dissolve or liquidate must file Form 966 within 30 days of the resolution. Form 966 applies only to corporations and farmers' cooperatives, not to all business types seeking to close an account.
Request written confirmation that the IRS has deactivated your number. Follow up if you do not receive acknowledgment within 45 days.
Preventing Future Multiple EIN Problems
Establish a clear filing pattern going forward under the correct Employer Identification Number for each business. Ensure that all future tax filings, payroll deposits, estimated tax payments, and business applications use only the correct number for each business.
Consistency in number usage over the next 12 to 24 months demonstrates good faith compliance and minimizes future confusion. After closing an account, you must file zero tax returns or make zero tax payments under that number.
Keep detailed records of all communication with the IRS regarding your multiple numbers. Save copies of every letter, phone call summary, and IRS response related to your accounts.
Gather documentation proving business separation if you have multiple legitimate businesses.
Collect business licenses, articles of incorporation, partnership agreements, lease agreements, bank statements, and business insurance policies showing that each business is legally and operationally separate.
Consequences of Ignoring Duplicate EIN Confusion
Ignoring multiple EINs for the same business issues will eventually trigger IRS automated matching systems to flag duplicate filings or conflicting income reports. The IRS will likely send you a notice asking you to explain or address the accounts.
Failing to respond or responding inadequately may result in the IRS unilaterally reassigning income or deductions from one account to another or assessing penalties for inconsistent reporting. Simultaneously, if either number has unpaid tax or an unfiled return, the IRS may initiate collection action on both accounts, placing liens, levying bank accounts, or garnishing wages without warning.
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