The Internal Revenue Service uses Tax Payer Identification Numbers to identify individuals and businesses for tax returns, statements, and many other tax-related documents. There are three primary Tax ID numbers the IRS employs: Social Security Numbers, Individual Taxpayer ID Numbers, and lastly Employer Identification Numbers. The Social Security Administration issues all Social Security Numbers while all other Tax ID numbers are furnished by the IRS. Here is a guide to understanding the three types of Tax ID Numbers and how to apply for them.
By far the most well-known and utilized Tax ID Numbers are Social Security Numbers commonly known as SSN’s. Social Security Numbers are 9-digit identification numbers issued to all United States citizens or to those who have obtained lawful alien status. There are three ways to apply for a SSN: apply on-line, visit your local Social Security office, or by calling 800-772-1213. Every applicant must complete an SS-5 form or the “Application for Social Security Card.” The SS-5 requires evidence of the applicant’s identity and citizenship that can be provided by a U.S. State-issued ID card, driver’s license, or U.S. passport. You must also provide a birth certificate to verify your age. All Social Security Number are issued free of charge.
For individuals who are neither U.S. citizens nor legal alien residents, you must apply for an Individual Taxpayer Identification Number or ITIN’s. Individual Taxpayer ID Numbers are issued by the IRS and only available to certain resident and non-resident aliens, their spouses, and dependents who cannot qualify for Social Security Numbers. The ITIN is also a 9-digit number similar to a SSN number meant for non-citizens who are required to file a federal tax return with the IRS. To be issued an ITIN you must complete a W-7 form or “IRS Application for Individual Taxpayer Identification Number.” This is a simple one-page form that requires the applicant to furnish documentation proving his or her foreign or alien status and identity. Each applicant may file either on-line, at any IRS walk-in office, or by utilizing the services of an Acceptance Agent. An Acceptance Agent is authorized by the IRS to assist applicants in obtaining ITIN’s.
The final primary Tax ID Number is the Employer Identification Number also known as a Federal Tax ID Number. An EIN is generally used by the IRS to identify a business, estate or trust and can be used upon successfully completing the two page SS-4 form. EIN’s are typically used by business to file tax returns, open bank accounts or to apply for a business license. Generally it can take up to two weeks for the IRS to process and issue an EIN. An applicant may apply for the EIN on-line or over the phone and the completed paperwork may also be faxed or mailed in to the IRS. Due to high demand please note that as of April 11, 2011, the IRS will only issue 5 EIN’s per day to each applicant.
Applying for Tax ID Numbers is a relatively streamlined process and better yet – free of charge.