EIN Verification: Why Your Business Needs it, How to Do It, and the Tools to Verify EIN

Employer Identification Number, or EIN, is a tax identification number the Internal Revenue Service (IRS) assigns to businesses. It’s like your business’ Social Security Number. An EIN gives your business a unique identity, separating it from businesses in the same industry or with similar names. On top of giving your business a unique identifier, EINs also help the government keep track of your business’ tax information, ensuring its compliance.

What is an Employer Identification Number (EIN)?

The EIN was introduced by the IRS through a Treasury Decision as part of the Tax Reform Act of 1974. The EIN was introduced as a measure to improve the tracking mechanism for tax-paying businesses.

EINs are 9-digit tax identification numbers, issued in an “XX-XXXXXXX” format. The first two digits of the EIN before the hyphen are based on the locations of the Campus of Record that assigns the EIN to a business. The 6/7 million series of EINs are reserved for Trusts, Estates, and Non-Profit/Exempt Organizations. This means that if the EIN has a 6 or 7 after the hyphen, the business associated with it is one of the aforementioned organizations.

EINs serve as unique identifiers for businesses that are separate from the identification number of their owner(s). This separation helps in distinguishing the tax records of the owner from those of the business. It also helps you keep your sensitive information safe by not having to share your SSN as a way to identify your business.

Having an EIN also verifies business identity for not just your business, but all businesses that have one. For your business, having an EIN presents an opportunity to build trust in your stakeholders as a government-recognized entity. For businesses that you interact or associate with, an EIN serves to act as an identity verification method that can help you and your business steer clear of suspicious entities or bad actors. This is why, it is important to know your own EIN as well as look up and verify the EIN of businesses that you and your business interact with.

How to retrieve your EIN online

Knowing your business’ EIN can help you verify its identity to entities you interact with. In case you do not know your business’ EIN or have misplaced it, here’s how you can retrieve it:

• Look at your EIN confirmation documents: On applying for an EIN, the IRS issues a confirmation document to the business once the EIN is assigned. In case the application was made online, a confirmation email should have been sent to the email address provided in the application process. Look for this email in the associated account, and save the digital confirmation document for your records.

• Cross-reference business records: In case you are unable to find the letter or email confirming your business’ EIN, you can reference business records and documents that require inputting the EIN. Your business’ past tax returns are the best way to find your EIN, so start with those.

• Contact the IRS: If all else fails, you can always connect straight with the IRS to retrieve your EIN. You can call the number 1-800-829-4933 from Monday to Friday, between 7 a.m.- 7 p.m. local time, and provide details of your business to retrieve your EIN.

It goes without saying that you need to have an EIN to be able to look it up. If you haven’t applied for an EIN and try looking it up, you won’t find anything. Applying for and having an EIN for your business is a good idea as it is only beneficial for your business.

How to Lookup EIN

Now that you know how to retrieve your business’ EIN, to communicate it with the various entities that your business interacts with, let’s take a look at how you can look up another business’ EIN. This can help you verify the authenticity of the business you are interacting with and help avoid any suspicious or illegal entities.

• Contact the Business: You can always get in touch with the people in the corresponding business and ask for their EIN. In case of any hesitation, you can contact people from the business’ payroll or accounting departments to retrieve the necessary information.

• Visit the IRS Website: The IRS website is a reliable source of information to look up another business’ EIN. What’s even better, is that the information provided on the IRS website is free.

• Referring to SEC’s EDGAR Platform: The US Securities and Exchange Commission’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system is another government-authorized platform that can help you verify the EIN of a business. Companies that list with the SEC must make information about their organization publicly available, and this information includes the company’s EIN.

• Employ Professional Help: Apart from these publicly available sources of information, your business can also employ professional services that can integrate EIN verification into your business processes.

EIN Verification with Signzy

As mentioned above, there are multiple sources to verify a business’ EIN. However, most of these sources require manual cross-referencing to verify the business’ identity. This manual process can be time-consuming and can leave room for error.

This is where Signzy’s EIN Verification API comes into play. With features like EIN Verification, Fetch, and Lookup, Signzy’s EIN API ensures that entities that your business interacts with are legitimate and pose no security threat to the business or its clientele. All of this, in just 0.9 seconds! Talk about fast!

So book a demo with Signzy, and streamline and expedite your KYB processes.

Conclusion

EIN is a doubly beneficial tool that helps your business strengthen its image through government verification and improved tax compliance. On top of this, EINs also help your business verify the identity of other companies that it may engage with. This allows avoiding suspicious or illegal businesses and other bad actors.