Employer Identification Numbers
An Employer Identification number (EIN) is also known as a Federal Tax Identification number, and is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online at the IRS's website. This is a free service offered by the Internal Revenue Service. You must also check with the states in which you do business to determine if you also need a state employer identification number.
DO YOU NEED AN EIN?
Among the reasons you need an EIN are:
• You have employees
• You operate your business as a corporation or partnership
• You file employment tax returns
HOW TO OBTAIN AN EIN:
The Internal Revenue Service has a number of ways in which you may obtain an EIN:
1. ONLINE—New!!!
The Internet EIN application is the preferred method for customers to apply for and obtain an EIN. You can find this option on the IRS website at www.irs.gov. Once the application is completed, the information is validated during the online session, and an EIN is issued immediatel y . The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), is located in the United States or U.S. Territories. The principal officer, general partner, grant or, owner, trust or etc. must have a valid Taxpayer Identification number (Social Security number, Employer Identification number, or Individual Taxpayer Identification number) in order to use the online application.
2. APPLY BY TOLL- FREE TELEPHONE SERVICE:
Taxpayers can obtain an EIN immediately by calling the Business& Specialty Tax Line at (800) 829-4933 . The hours of operation are 7:00 a.m. - 10:00 p.m. local time, Monday through Friday. A representative takes the information, assigns the EIN, and provides the number to an authorized individual over the telephone.
3. APPLY BY FAX
Taxpayers can FAX the completed SS-4 application to their state FAX number (which can be found in the Instructions for Form SS-4) if it contains all of the required information. If the IRS determines that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type. If the taxpayer's fax number is provided, a fax will be sent back with the EIN within four (4) business days.
4. APPLY BY MAIL
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer. The IRS mailing address can be found in the “Instructions for Form SS-4”.
E-VERIFY PROGRAM
E-Verify (formerly known as the Basic Pilot/Employment Eligibility Verification Program) is an Internet based system operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA). It allows participating employers to electronically verify the employment eligibility of their newly hired employees. E-Verify is free and voluntary and is the best means available for determining employment eligibility of new hires and the validity of their Social Security numbers. Once registered, employers use E-Verify by entering information from Form I-9, Employment Eligibility Verification Form. The Program compares employee information against more than 425 million records in the SSA data base. Currently, 93% of an employer's queries are instantly verified as work-authorized using this system.
NEW PHOTO TOOL
E-Verify's new Photo Screening Tool is the beginning of biometric verification within the E-Verify system. This additional feature will be the first step in giving employers the tools they need to detect identity theft in the employment eligibility process. The Photo Screening Tool feature allows an employer to check the photo on his or her new hire's Employment Authorization Document (EAD) or Permanent Resident Card ("Green Card") against the 14.8 million images stored in DHS immigration databases.
HOW TO PARTICIPATE
Currently more than 23,000 employers are participating in the E-Verify program. You can register on the DHS website at www.dhs.gov/E-Verify. Newly registered employers will go through a training program to help them learn how to use the system.
TAX RESEARCHER is distributed with the understanding that the publisher is not rendering legal, accounting or other professional services. If such advice or assistance is required, an attorney or accountant should be consulted. This newsletter is published monthly by Statutory Research, a department of the Employer Services Division. Address comments to: ADP, Inc., Statutory Research Department, One ADP Boulevard (M/S 364), Roseland, New Jersey 0706. Copyright 2007 ADP, Inc.
For more information, contact your local ADP representative. Go to www.adp.com or call 1.800.CALL.ADP ( 1.800.225.5237 ) The ADP Logo is a registered trademark of ADP of North America, Inc. All other trademarks and service marks are the property of their respective owners.
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