When you are starting a business, you must apply for a federal tax ID. The fastest way to do this is to apply online for an EIN, or employer identification number, but you can choose to apply by mail as well. If you apply for an EIN number, and later need to cancel, here are a few things you should know:
You Can’t Really Cancel an EIN: Whether you apply online for an EIN, or choose the longer route of applying by fax or by mail, your EIN number becomes permanently attached to your business. If you applied online for an EIN that you don’t need, you can request to close the IRS account for that EIN. However, that EIN will never disappear and will never be reassigned. You’ll also be able to use that EIN for that business at a future time.
You’ll Need to Explain Yourself: If you need to close a business account after you apply online for an EIN, you will need to send a letter to the IRS explaining your request. You’ll need to include information such as the complete legal name of your business, the address, the EIN, and the reason that you need to close the account.
Organization Type Matters: If you apply online for an EIN for a tax exempt organization and later need to close your account, you may need to send your letter and explanation to a different source. Figure out the nature of your organization before you mail your request to close your account to ensure that you are sending everything to the right place. You can also find a checklist on closing a business via irs.gov.
While you cannot really cancel an EIN, you can close your account with the IRS and make tax season a whole lot more simple.