How do I Cancel my EIN?
Most people lay in bed at night wondering about world peace, how their children will adapt to a global economy, where their next meal will come from, or any other number of important items. I oftentimes think about the little things like what happens when you no longer need your Employer Identification Number (EIN).
An EIN functions for businesses like the Social Security Number functions for individuals and there are a host of reasons that businesses need to obtain an EIN. The number one reason that we typically see clients obtain an EIN is to allow them to set up an individual 401(k) for the consulting businesses as they transition into retirement. So oftentimes we see clients establish an EIN with the IRS, open up an individual 401k and fund it for a few years while they transition from their career into full retirement. But what happens to that pesky little EIN? Does it 'die' with the business? If so, how does the IRS know that it has 'died'?
The simple answer according to the IRS is that the EIN is unique to each business and is never re-assigned. You can send a letter to the IRS indicating that the business is no longer in need of an EIN (click here for the instructions) but they do not re-assign it. They suspend it but the EIN is still tied to your business just in case you need it again in the future. You can click on the following link which will take you to the IRS website with the specific steps:
Fortunately, if you were laying in bed wondering about what happens to the EIN of businesses who no longer need them, you can now move on to thinking about more important things.