The Internal Revenue Service (IRS) requires anyone who pays taxes or files a return to having a Federal Tax ID Number. For individuals and certain businesses, this would be a Social Security number, or an Employer Identification Number (EIN), for required businesses and nonprofit businesses or charity. In some situation, organizations do not need to file tax returns. However, these organizations may still require an EIN, also known as Tax ID. Thankfully, online filing services like IRS-EIN-Tax-ID make the process for applying for a Federal Tax ID Number much simpler.
EIN Online Application
Nonprofits and organizations requesting exempt status must apply for an EIN with the IRS. They can accomplish this by completing Form SS-4 online through the IRS-TAX-Tax-ID website, which provides them with the number within one hour of submitting the application.
Returns and Employees
All organizations that employ workers, nonprofit or not, must apply for a Tax ID. This number is required by the IRS to report income, payroll taxes withheld, and to make estimated payments. A tax-exempt organization, such as nonprofits, are also required to file annual Form 990 to report various information including gross receipts and assets. The Form 990 they file (990, 990-N, or 990-EX) depends on the yearly amount of gross receipts. In the nonprofit fails to file that return, they risk losing their tax-exempt status.
Change in Structure or Ownership
Nonprofits that go through a change in structure or ownership, must apply for a new EIN from the IRS. For example, if your nonprofit is operated as a partnership, but you decide to incorporate the group, you must then apply for a new EIN. However, a new Tax ID is not needed if simply changing the principal location or the name of the organization.
Check Status of Application
Once you have submitted your EIN application through the IRS-TAX-Tax-ID website, you can verify the EIN number status by entering your order number or the email address used in your application.