The EIN strategy was created by the IRS in 1974 by Treasury Decision (TD) 7306, 39 Fed. Reg. 9946 . The ability for EIN’s is derived from 26 USC 6011(b), requiring citizen identification with the aim of payment of employment taxes. The provision was first enacted in 1954 as part of the revision of the Tax Code. 26 USC 6109 expanded in 1961 this ability. There are EIN Decoders online that can identify in what state the company registered the EIN.
A business needs an EIN in order to pay employees and to file business tax returns. To be considered a Venture, LLC, Corporation, S Corporation, Non-profit, etc. a business must obtain an EIN. Also, financial institutions for example brokerage houses, credit unions, and banks Won’t open an account for a corporation without an EIN.
Since all corporations – including ones with no income – must file at least a federal income tax return, a corporation incorporated in the United States or managing generally must obtain an EIN anyhow before or after being issued its charter.
Although all 10 campuses can assign an EIN, if required, in 2001, EIN assignment was centralized at three of the IRS campuses.