Having an application for an EIN turned down isn’t a common occurrence, but it does happen occasionally. If it happens to you, here’s what to do:
1. Understand what happened: Most rejections relate to a 101 error, where your business name has a conflict.
2. Fix the issue: Make sure your company name is registered exclusively to you.
3. If necessary, reapply online or via mail: If your business already has an EIN, you don’t need to apply for EIN unless you’re changing it into a partnership or corporation.
4. Contact the IRS or a trusted financial partner for help: If you lost your EIN, ask for help finding it.
The 101 error from a rejected EIN number application means that there was a conflict with your business name. The IRS requires a unique name for tax purposes. The 101 code means:
• Your business name is already taken
• You put multiple addresses from different states on the application
• You forgot to fill in required fields
Make sure to read the tax ID application instructions carefully or get in touch with trustworthy advisors to help you understand how to obtain EIN if needed.
Another reason EIN applications get rejected is because you don’t qualify for one. This happens when you already have a valid EIN number. You only need a different business EIN number if:
• You buy an existing business
• You start a new, separate legal entity – not a division
• You change the ownership structure of your business
If you’re just changing the name of your business or moving to a different location, you don’t need a new EIN.
The IRS requires you to have a street address, not a P.O. Box, for your company, even if you do business online. A physical location also gives your clients a greater sense of trust.