A federal employer identification number (FEIN) and an employer identification number (EIN) are the same thing. An EIN is also referred to as a federal tax identification number. An EIN is a nine-digit number that the Internal Revenue Service (IRS) assigns to a business. An FEIN identifies a company in the same way that a Social Security number identifies an individual.
An FEIN enables the IRS to identify a business for taxation purposes. Banks use a company's FEIN to establish the existence of the business for banking purposes. A financial institution may require a business to have a valid FEIN prior to issuing a loan or a line of credit. Every corporation and partnership must obtain an FEIN. All businesses that have employees must get an FEIN from the IRS. In addition, companies that pay taxes for firearms, alcohol and tobacco must get an FEIN from the IRS.
Sole proprietors that do not have employees do not have a requirement to get an EIN. Sole proprietors may use their Social Security number for business purposes, instead of getting an EIN from the IRS. Also, limited liability companies (LLCs) that a single member forms and operates are not required to acquire an EIN. Every LLC that has more than one member must acquire an EIN from the IRS.
How to Apply
A company may acquire an FEIN from the IRS website, by calling the IRS, by mail or by fax. The company must provide information such as the number of people that work for the business; the legal name and address of the business; as well as the name, address and Social Security number of an authorized representative. It takes up to four business days to receive an FEIN when applying by fax, and it may take as long as four weeks to receive an FEIN by mail.
Once the IRS assigns an EIN to the business, it gets permanently attached to the business. The IRS will not assign the company's EIN to another business, even if the company terminates its existence. The IRS does not cancel a company's EIN, but the IRS can close a company's business account when a written request gets submitted stating the reason for closing the account.