Many small businesses in Brownsville and the Rio Grande Valley reach a point where a bank, a client, or a state agency asks for an "EIN." An Employer Identification Number is the federal tax ID number the IRS assigns to businesses, tax-exempt organizations, and other entities. This article explains, in plain language, what the IRS says about who needs one, how to apply, when you can start using it, and what to do when the business changes or closes. Sources were checked on October 27, 2026. This article does not review any person's tax situation.
What an EIN is
According to the IRS page on Employer ID Numbers, an EIN is a federal tax ID number for businesses, tax-exempt organizations, and other entities, and you can get one for free directly from the IRS. The IRS publication Understanding Your EIN (Publication 1635) describes it as a nine-digit number written in the format 12-3456789.
An EIN is different from an Individual Taxpayer Identification Number. An ITIN is issued to certain individuals for federal tax reporting, while an EIN identifies a business or other entity. Our earlier article on the ITIN and Form W-7 covers the individual side.
Who generally needs an EIN
The IRS page on how to get an employer identification number says that, generally, you need an EIN to:
- Hire employees
- Operate a partnership or corporation
- Pay sales and excise taxes
- Change business structures or ownership
- Administer certain trusts, retirement plans, and estates
The IRS Employer ID Numbers page adds that you also need an EIN if you withhold taxes on income, other than wages, paid to a nonresident alien. It says you can still request one for banking or state tax purposes even if you don't need it for federal tax purposes.
If you are deciding whether to bring on workers, our earlier article on 1099-NEC vs. W-2 workers explains how the IRS separates contractors from employees.
Before you apply
The IRS gives a few points to handle first:
- Form the entity first. If you are creating an LLC, partnership, or corporation, the IRS says to register it with your state before you apply for an EIN. In Texas, that generally means a filing with the Texas Secretary of State.
- Use the exact legal name. Enter the business name as it appears on your registration or formation documents.
- Know your responsible party. The IRS page on responsible parties and nominees says a responsible party is someone who owns, controls, or exercises effective control over the entity and directly or indirectly manages its funds and assets. The responsible party must be a person, not an entity, except for government entities.
- Don't use a nominee. The IRS says a nominee, someone given limited authority to act during formation, can't apply for an EIN and shouldn't be listed on Form SS-4.
How to apply
The IRS lists these ways to apply when the principal place of business is in the United States:
- Online. The IRS online application is free. It must be completed in one session, can't be saved for later, and expires after 15 minutes of inactivity. The IRS says you can use the tool if you are a domestic organization with a principal place of business in the U.S. and a responsible party who has a Social Security number or ITIN. The IRS warns: "Beware of websites that charge for an EIN. You never have to pay a fee for an EIN."
- Fax. Send Form SS-4 to the fax number listed by the IRS. The IRS says that if you include a fax number, it will fax back a cover sheet with the EIN in about four business days.
- Mail. Mail Form SS-4 to the address listed by the IRS. The IRS says you'll get your EIN in about four weeks.
If the principal place of business is outside the United States, the IRS says you can apply by phone at 267-941-1099, Monday through Friday, 6 a.m. to 11 p.m. Eastern time, or submit Form SS-4 by fax or mail to the international numbers and address on the IRS page. This can matter for owners whose business is based in Mexico.
The IRS also says you can apply for only one EIN per responsible party per day, whether online, by phone, by fax, or by mail.
When you can use the number
According to the IRS, you can use your EIN right away for most business needs, such as opening a bank account, applying for business licenses, and filing a tax return by mail. The IRS says to wait up to two weeks before the number will pass the IRS TIN Matching Program, before you e-file a return, and before you make tax deposits and payments electronically.
If a return is due and you haven't received the EIN yet, the IRS says to write "Applied For" and the date you applied in the space for the number.
Step by step: getting an EIN
1. Confirm the entity type
Decide whether the business is a sole proprietorship, partnership, LLC, corporation, or other entity. If it is a state-registered entity, complete the state formation first.
2. Gather the responsible party's information
The IRS says the application generally needs the responsible party's name, taxpayer ID number, and signature.
3. Choose how to apply
Use the free IRS online application if you qualify. Otherwise, use Form SS-4 by fax or mail, or the international phone line if the business is based outside the U.S. Check the Instructions for Form SS-4 for line-by-line guidance.
4. Save the confirmation
Print or save the EIN confirmation for your records.
5. Keep the information current
The IRS says to use Form 8822-B to report changes to your responsible party, address, or location within 60 days.
When the business changes or closes
The IRS page Do you need a new EIN? says you generally need a new EIN when you change the entity's ownership or structure, and not when you only change the business name or address. For example, the IRS says a sole proprietor gets a new EIN when incorporating, forming a partnership, or declaring bankruptcy, while an LLC that changes its tax election to a corporation or S corporation does not need a new EIN.
The IRS says it can't cancel an EIN, but it can deactivate it. The IRS page on canceling an EIN and closing your account explains the steps, including filing any outstanding returns.
The IRS also says a business entity should have only one EIN. If you received an EIN you didn't request, or believe someone stole your EIN, the IRS has a page on what to do if you received an EIN you didn't request.
Frequently asked questions
Does an EIN cost money?
No. The IRS says you never have to pay a fee for an EIN and warns about websites that charge for one.
I lost my EIN. How do I find it?
The IRS suggests looking at the notice it issued when you applied, contacting the bank that holds your business account, checking with agencies where you applied for state or local licenses, and looking at past business tax returns. If you still can't find it, the IRS says to call the Business and Specialty Tax Line at 800-829-4933, Monday to Friday, 7 a.m. to 7 p.m. local time.
Do I have to report beneficial owners when I get an EIN?
The IRS says some corporations, LLCs, and other entities may be required to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). Whether that applies is a separate question from the EIN application.
Do I need an EIN to make estimated tax payments?
Not necessarily. Many self-employed individuals make estimated payments using their own taxpayer ID number. Our earlier article on quarterly estimated taxes covers the IRS basics.
Questions in Brownsville and the Rio Grande Valley
Garduño Tax & Associates works with individuals, families, and small businesses in Brownsville and South Texas. If you are starting a business or adding employees and want to organize the IRS forms involved, you can contact the office to talk through the paperwork.
This article is general information, not tax advice. Reading it or contacting the office does not create a client relationship.