The EIN is the cheapest item on any formation checklist and the one that stops everything else when it goes wrong. It is free, it takes fifteen minutes for anyone with a Social Security number, and it can take a month for anyone without one. Almost all the difficulty comes from three places: applying before the state has approved the entity, naming the wrong responsible party, and not knowing which of the three routes your situation allows.
What an EIN Actually Is
An Employer Identification Number (EIN) is a nine-digit federal tax identification number issued by the IRS in the format XX-XXXXXXX. Every US entity that hires employees, files federal tax returns, opens a bank account, or operates as anything other than a sole proprietor needs an EIN. The EIN is the entity-level equivalent of a Social Security Number, it identifies the entity to the IRS, to banks, to state tax authorities, and to payroll processors.
EINs are issued by the IRS for free. There is no government filing fee. Third-party services that charge to "obtain an EIN" are charging only for the convenience of doing the application on your behalf, the IRS itself never charges for the number.
EINs are permanent. Once issued, an EIN stays with the entity for life. Closing the entity does not retire the EIN, the IRS keeps the number in its records and will not reissue it. If you start a new entity, you get a new EIN.
Who Needs an EIN
At a Glance
| Item | Value |
|---|---|
| Form | IRS Form SS-4 |
| Cost | $0 (free) for the IRS application |
| Online processing | Same-day (for US-based applicants with SSN/ITIN) |
| Fax processing | 4 business days |
| International (no SSN/ITIN) | Phone application or fax: 4 weeks |
Every LLC, corporation, partnership and nonprofit needs an EIN, even with no employees and no revenue. The EIN is required to open a business bank account, file federal tax returns, hire employees, register for payroll, apply for business licences, register for a seller's permit, and submit information returns such as 1099s.
Single-member LLCs without employees can in principle use the owner's Social Security number for federal tax purposes, but every bank requires an EIN to open a business account, so they end up needing one anyway. Using an EIN also keeps the owner's Social Security number off every Form W-9 that goes out to a client.
Sole proprietors do not need an EIN unless they have employees. They can use their SSN. But many sole proprietors get an EIN anyway to avoid using their SSN on 1099s and W-9s issued to clients.
Foreign-owned LLCs (including foreign-owned SMLLCs) need an EIN, regardless of whether they have US source income. This is essential for Form 5472 reporting (covered separately in this series).
Compliance monitoring
If you would rather not do this yourself, we track every deadline for your entity and file on time, in every state where you are registered. Or keep reading and file it on your own. This guide covers everything you need either way.
How to Apply for an EIN
The IRS offers three application paths, each with different speed and eligibility requirements.
Path 1: Online Application (Fastest, Same Day)
The IRS online EIN Assistant issues an EIN immediately upon completion. The application takes about 15 minutes. The EIN is delivered as a PDF confirmation letter (CP 575) at the end of the session, save it immediately, the IRS does not email a copy.
Eligibility: the "responsible party" (the person controlling the entity) must have a valid SSN, ITIN, or existing EIN. Foreign founders without any of these CANNOT use the online application.
Hours: the online EIN application is not available around the clock. The IRS publishes its hours as Monday to Friday 6:00 a.m. to 1:00 a.m. the following day, Saturday 6:00 a.m. to 9:00 p.m., and Sunday 6:00 p.m. to midnight, all Eastern time. The session itself expires after 15 minutes of inactivity and cannot be saved, so gather the entity name, formation state, formation date and responsible party details before you start.
Restriction: EIN issuance is limited to one per responsible party per day, and that limit applies to every route, online, telephone, fax and post alike. It is not an online-only throttle. Anyone forming several entities on the same day, whether for clients, for a group structure or for family members, has to spread the applications across days or name genuinely different responsible parties, which only works where the facts support it.
Path 2: Fax Application (4 Business Days)
For applicants who cannot use the online system, whether because there is no SSN or ITIN or because the daily limit is already spent, fax is the next fastest route. There are three numbers and the right one depends on where the applicant is, not where the entity was formed. Fax to +1-855-641-6935 if the applicant's legal residence, principal place of business or principal office is in one of the 50 states or the District of Columbia. Fax to +1-855-215-1627 if the applicant is inside the United States but outside those, and to +1-304-707-9471 if the applicant is outside the United States altogether.
Processing time: 4 business days. The IRS faxes the EIN back to the number provided on the SS-4. If no fax number is provided, the EIN is mailed (adds 4-5 weeks).
Line 7b decides whether a foreign founder can file at all, and the instruction is short: where the responsible party does not have and is not eligible to obtain an SSN or ITIN, enter FOREIGN on line 7b. Not blank, not a passport number, not an ITIN applied for and not yet issued. The corollary is that a foreign founder does not need an ITIN in order to get an EIN, which is the most common misunderstanding here and the reason people spend months on the wrong form. The ITIN question is separate, covered in the Form W-7 guide.
Path 3: International Phone Application
For foreign founders without SSN, ITIN, or US legal residence: call the IRS International Tax Service at +1-267-941-1099 (NOT a toll-free number; international rates apply). The line operates Monday through Friday, 6am to 11pm Eastern Time.
Have the completed SS-4 in front of you when you call. The IRS agent walks through the form line-by-line and issues the EIN at the end of the call. Total call time is typically 30-45 minutes.
Documentation: passport number, foreign address, and the entity's US formation state and date. The responsible party can be a foreign individual living abroad.
Processing time: immediate on the phone call. The EIN confirmation letter (CP 575) is mailed within 4 weeks to the foreign address.
The "Responsible Party" Requirement
The IRS requires every EIN application to identify a "responsible party", the individual who controls, manages, or directs the entity and the disposition of its funds and assets. This is typically an owner with the most decision-making authority.
The responsible party must be an individual, not another entity. A parent corporation cannot be the responsible party for its subsidiary, a specific human must be named.
The responsible party can be updated later via Form 8822-B (covered in the IRS records-update section of this guide). The EIN itself stays the same, only the responsible-party name and address change.
For foreign-owned LLCs: the responsible party can be a foreign individual without an SSN. The fax and telephone routes accommodate this, and line 7b takes FOREIGN. The wider path for owners outside the US is in forming a US LLC without an SSN.
The nominee problem is worth naming. Some services historically listed themselves as responsible party to get the number issued quickly. The IRS position is that the responsible party is the person who actually controls the entity and its funds. A nominee means notices go to the wrong person and the bank sees a name that does not match the operating agreement. The correction runs through Form 8822-B.
Three EIN Applications in Practice
The three below are composites of applications of this type. The IRS numbers, hours and processing times are the real ones; the business facts are illustrative.
Example 1: Sable Point Coffee Roasters, fifteen minutes and no fee
Two US founders form an LLC on a Tuesday and the state posts approval on the Thursday. On Friday one of them opens the online application, names herself as responsible party with her own Social Security number, and has the number and the CP 575 letter on screen inside fifteen minutes. She downloads the letter immediately, because CP 575 is issued once and never emailed. The bank opens the account on Monday. Total cost: nothing. The only thing that could have gone wrong was applying on the Tuesday, before the state record existed.
Example 2: Lumen Kite Ltd, a London owner with no US identifiers
A UK company forms a Wyoming single-member LLC to hold a US software business. Its director has no SSN and no ITIN, so the online route is closed. The SS-4 names the director as responsible party with FOREIGN on line 7b and goes by fax to +1-304-707-9471, with a return fax number on the form. The EIN comes back in four business days; without a return fax number it would have arrived by post to London weeks later. The entity now has a filing obligation nobody mentioned at formation: as a foreign-owned disregarded entity it owes Form 5472 with a pro forma Form 1120 every year.
Example 3: Ravenwood Legal Services and the one-per-day wall
A Phoenix firm forms four entities for a client on the same afternoon and plans to pull four EINs before close of business. The first is issued and the rest refused, because issuance is limited to one per responsible party per day across every route and the same director was named on all four. Naming a different person on each is not available unless that person genuinely controls the entity and its funds. The answer is to schedule the applications across four days. Firms that discover this on a closing deadline lose a week.
Common EIN Application Mistakes
Five failures account for most rejected or wasted EIN applications. None of them costs a penalty directly; all of them cost time at the point in a formation where time is scarcest.
Mistake 1: Applying before the state has approved the entity
What happens. The founder files formation documents and applies for the EIN the same day. Why it fails. The IRS issues the number to an entity that exists, and the name and formation date on the SS-4 have to match the state record. Consequence. Either a rejection, or worse, a number issued against a name that does not match the certificate, which surfaces at the bank rather than at the IRS. Prevention. Wait for approval, then copy the entity name from the filed document character for character, including the comma before LLC if the state put one there.
Mistake 2: Paying $100 to $300 for something the IRS gives away
What happens. A founder with a Social Security number pays a third party to submit an application they could file in a quarter of an hour. Why it fails. Nothing fails; the money is spent on a form with no fee. Consequence. A cost with no service behind it, repeated on every entity. Prevention. Pay for help only where the route is harder: no SSN or ITIN, a foreign responsible party, or a batch hitting the daily limit.
Mistake 3: Naming a company as the responsible party
What happens. A parent company or holding entity is entered as responsible party for its subsidiary. Why it fails. The responsible party must be a natural person, with the narrow exception of government entities. Consequence. A rejected application, and in a group formation, a delay that pushes back every downstream account. Prevention. Name the individual who controls the entity and its funds, even where a company owns it.
Mistake 4: Losing the CP 575 letter
What happens. The confirmation letter is closed with the browser tab. Why it fails. CP 575 is issued once and never reissued. Consequence. The replacement is a 147-C verification letter, weeks by post, and it is what a bank or an acquirer asks for at the moment you cannot wait. Prevention. Save the PDF to the entity's document store the moment it appears.
Mistake 5: Planning a batch formation around a limit that applies everywhere
What happens. An adviser assumes the one-per-day rule is an online throttle and switches to fax for the second entity. Why it fails. The limit is one EIN per responsible party per day across every route. Consequence. Applications refused after the first, and a formation timetable that slips by however many entities are in the batch. Prevention. Sequence multi-entity work across days from the start.
What to Do After Getting Your EIN
Open a business bank account immediately. Banks require the EIN confirmation letter (CP 575). Without it, you cannot deposit revenue under the entity name.
Register for state employer accounts if you will hire employees. Each state requires a separate state employer account (state unemployment insurance + state withholding).
File Form 2553 if electing S corporation tax treatment. The election has its own clock, 2 months and 15 days from the start of the tax year it is to take effect, and it cannot be filed without the EIN.
File Form 8832 if electing C corporation or partnership treatment for an entity that would otherwise be classified differently. Set up bookkeeping against the new EIN at the same time, so the first bank statement and the first ledger agree.
Update your state of formation if you elected a different tax classification, most states automatically follow federal classification, but check.
What Happens When the EIN Is Wrong, Late or Missing
There is no penalty for failing to apply for an EIN, and no deadline to miss. The exposure is entirely indirect, and it is large, because the EIN is the key to filings that do carry penalties.
A foreign-owned single-member LLC cannot file Form 5472 without one, and the charge for not filing Form 5472 is $25,000 for the year, with a further $25,000 for each 30 day period once the failure continues more than 90 days after the IRS writes. Founders who postpone the EIN because the business has not started yet are postponing the filing, not the obligation.
An employer cannot enrol in EFTPS without one, and payroll deposits made late attract 2% at one to five days, 5% at six to fifteen, 10% beyond that, and 15% once the deposit is still unpaid more than ten days after IRS notice. On a $20,000 monthly deposit those tiers are $400, $1,000, $2,000 and $3,000. Enrolment is not instant, so the EIN needs to exist well before the first payroll run rather than during it. Payroll for small business covers the sequence.
An entity electing S corporation treatment needs the EIN on Form 2553, due within 2 months and 15 days of the start of the tax year the election is to take effect. Miss that and the election slips a year, and a late return is charged at $260 per shareholder per month.
How File.Business Handles EIN Applications
File.Business handles EIN applications as part of every LLC and corporation formation. For US founders with SSN/ITIN, we use the online IRS EIN Assistant for same-day issuance. For foreign founders, we handle the IRS International Tax Service phone call or fax application, including preparing the SS-4, coordinating the responsible-party documentation, and delivering the CP 575 confirmation letter to your document vault.
Standalone EIN service: $99 flat for foreign founders without SSN/ITIN (where the IRS phone or fax path is required). For US founders, the online EIN application is free and we recommend doing it yourself, the application takes 15 minutes and there is no benefit to paying a third party.
Frequently Asked Questions
How much does an EIN cost?
The IRS does not charge for an EIN, applications are free. Third-party services charge a convenience fee for handling the application. Foreign founders without SSN/ITIN typically pay $99-$300 because the phone or fax path requires US-based handling.
How fast can I get an EIN?
Same-day if you use the IRS online EIN Assistant (US applicants with SSN/ITIN). 4 business days via fax. Immediate via the IRS International Tax Service phone call (foreign founders). The CP 575 confirmation letter is mailed within 4 weeks.
Can a foreign founder get an EIN without an SSN or ITIN?
Yes. Foreign founders apply via fax or by calling the IRS International Tax Service at +1-267-941-1099. The phone application issues the EIN during the call. The responsible party can be a foreign individual living abroad, no US presence required.
Do I need a US address to get an EIN?
No. The IRS accepts foreign addresses for the responsible party. The entity itself must be formed in a US state (which requires a US registered agent address), but the responsible party can be located abroad.
What is the "responsible party" on Form SS-4?
The individual who controls, manages, or directs the entity and the disposition of its funds and assets. Must be a person (not an entity). Can be updated later via Form 8822-B without changing the EIN.
What if I lose my EIN confirmation letter (CP 575)?
Request a 147-C letter from the IRS (EIN verification). Call the IRS Business and Specialty Tax Line at +1-800-829-4933. The 147-C letter is mailed within 4-5 weeks. Banks and the IRS accept 147-C as equivalent to CP 575.
Can my LLC change its EIN if I add members?
No. EINs are permanent for the entity. Changing from single-member to multi-member changes the federal tax classification (disregarded entity to partnership) but the EIN stays the same.
File.Business handles federal compliance for you
From EIN to Form 5472, federal filings stack up fast. File.Business pairs your entity with the right federal filings on a single calendar, with deadline tracking, automatic preparation, and CPA partnership for income tax returns.
This guide is written from the official sources below. Fees, forms, and deadlines change; confirm the current requirement with the agency before you file.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
