Q: Does a small company need a tax ID number?

A: A sole proprietor who does not have any employees and who does not file any excise or pension plan tax returns is the only business person who does not need an employer identification number. In this instance, the sole proprietor uses his or her social security number as the taxpayer identification number.

Q: How do I apply for an employer identification number (EIN)?

A: By telephone or mail. To obtain an EIN, you must complete Form SS-4, Application for Employer Identification Number. After you have completed the Form SS-4, you can get the EIN by mail, or by phone. The Instructions for Form SS-4 provide both an IRS service center address and a phone number to apply under the Tele-TIN program.

Online. You may also apply online. Once an EIN has been successfully completed and submitted, an EIN will be issued. Go here to learn more and apply online.

Through your state office. Some states participate in a program called the Fedstate Federal Employer Identification Number (EIN) project. This allows you to apply directly from your state. Go here to determine if your state takes part in the Fedstate Program.

Q: Under what circumstances am I required to change my employer identification number (EIN)?

A: If you already have an EIN, and the organization or ownership of your business changes, you may need to apply for a new number. Some of the circumstances under which a new number is required are as follows:

1. An existing business is purchased or inherited by an individual who will operate it as a sole proprietorship;
2. A sole proprietorship changes to a corporation or a partnership;
3. A partnership changes to a corporation or a sole proprietorship;
4. A corporation changes to a partnership or a sole proprietorship; or
5. An individual owner dies, and the estate takes over the business.