Some of our clients have had trouble filing EIN applications on their own, and have asked us, “Can I get denied from getting an EIN?”
It is possible to get denied for an Employer Identification Number, or EIN. Below we detail some common problems and how you can avoid them:
An EIN application may be denied for conflicts resulting in a 101 error. This type of error occurs when there is an entity name conflict on the EIN application.
More specifically, the IRS checks to ensure that the entity name is unique. This is similar to the way state agencies require a unique entity name within that state before a corporation or Limited Liability Company can file articles of incorporation or organization.
There are several areas within the EIN application where a state must be listed. For example, the physical address of a business may be located in a different state than where the business incorporated.
Multiple states on an EIN application my increase the likelihood of a 101 error, as the IRS will be forced to check multiple states to ensure the business name is unique in each state listed on the form before it will issue an EIN.
We’ve also had clients ask, “Can I get denied from getting an EIN if I have already applied for an EIN online?”
This is a common question because there are some cases in which you can’t apply for an EIN online.
All EIN applications require a responsible party name and a matching federal tax ID. There are three acceptable tax IDs: Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or another EIN.
You may not use an EIN number obtained electronically to obtain other electronic EIN numbers. If you are unsure about how an EIN was obtained, you should check your EIN number online; if the two first numbers are 20, 26, 27, 45, 46, or 47, that means the EIN was generated online.
If you have other questions about why your application was denied, please contact us directly and we will assist you personally.
Getting an EIN does not have to be a time-consuming and difficult process. Taking a few steps will ensure that your application does not have an error that will prevent you from getting your business up and running. Knowing what not to do can be the best way to have a clean application.
If you are worried about problems with an EIN, the Reference Number 101 Error will commonly come up in an application. When you see this error, it means there is an entity name conflict on the application. This error is easy to avoid, but make sure to be diligent, particularly if your business is in multiple states.
The IRS will thoroughly check to see if the entity name is unique. The state will be listed in multiple locations on the application. Make sure the address is correct, since it will be listed in multiple locations.
Getting an EIN helps your business throughout its life, including if you need to get money when you are getting started. This number will be used for filing tax returns. The EIN can be used by employers, sole proprietors, and corporations. You will need to submit this application, whether you have zero employees or hundreds.
Filling out your application can be done online, by fax, or by mail. Completing the application online will be the best way for you to get your EIN. Once you have your EIN, you will be able to use this number immediately.
The EIN application is often the first step to securing much-needed capital for your business. This will help you when it comes time to complete important paperwork for your business, including tax returns.
Another reason you might be denied getting an EIN is you are already listed as the responsible party on another EIN application that has been approved online. The IRS will not allow a person or entity to be a responsible party on more than one EIN that was obtained through an online application.
As you fill out your EIN application, carefully think about whether or not you are already listed as a responsible party on an EIN. It’s a good idea to always keep copies of important government-related paperwork, so that you can refer back to it if needed.
Getting an error code and having to wait to obtain your EIN can be frustrating. It sometimes is tedious to resolve the situation and you might have to start from the beginning with your application. You do not have to waste time talking to IRS agents on the phone, however.
If you do get a 101 Error notification when you apply for your EIN, IRS-EIN can help you work through the issue as quickly as possible. You may have to submit additional proof and paperwork, including documents showing your entity or business name or your formation documents.
It is best to be thorough and carefully when first submitting your EIN application. Consider if you have checked the name of your business to make sure no one else is using it. Take care to not fill out an online EIN application if you have already submitted one online before. And, be certain that you have not been listed as the responsible party on an EIN application filled out online.