What Is an EIN Verification Letter (147c)?
If you’re starting a business, you will likely need an Employer Identification Number (EIN), a nine-digit number assigned by the Internal Revenue Service (IRS) that helps identify your business for tax purposes.
You may also need to obtain an EIN Verification Letter (147c). The IRS issues this document to confirm you have a valid and active EIN associated with your business, which is important when opening a bank account, hiring employees, or applying for credit. Read on to learn a bit more about the EIN Verification Letter (147c) and how to get one.
New to entrepreneurship? Visit our How to Start a Business guide, to learn more about the ins and outs of running a business.
What Is an EIN?
An EIN is basically your business’s Social Security number. The IRS issues this nine-digit number to uniquely identify your company and track its financial information.
No two businesses have the same EIN. If you start multiple companies or organizations, each one of them will have its own distinctive identification number.
An EIN is important because it helps businesses identify themselves when dealing with the government, financial institutions, and other businesses. Without an EIN, businesses may face acceptance issues when filing for taxes and other necessary documents.
That's not all — an EIN provides many benefits and also can help business owners protect their personal information. With an EIN, your business can:
- Protect your personal information from creditors and serve as a point of contact when dealing with banks, vendors, and government agencies;
- Secure business financing through loans and lines of credit;
- Pay all required taxes (e.g., federal, state, local income tax, sales tax, payroll taxes);
- File tax returns and other documents required by the IRS; and
- Open a business bank account.
Without an EIN, businesses may find it difficult to open a business bank account, secure financing, or even hire employees. But, obtaining an EIN is a straightforward — and free — process you can do easily online.
EIN Verification: CP 575 vs. Letter 147c
Both the EIN Confirmation Letter (CP 575) and the EIN Verification Letter (147c) serve as official documents issued by the IRS confirming a business’s EIN.
These documents provide proof that a business has an active and valid EIN and also confirm essential information about the business, such as its legal name, address, and any changes to the EIN since its issuance. If you ever need to provide proof of your business’s EIN, either document will do this.
EIN Confirmation Letter (CP 575)
The IRS issues the EIN Confirmation Letter (CP 575) when you first obtain your EIN. This document is only issued once; therefore, you can’t get another copy if you misplace your EIN Confirmation Letter (CP 575). This is where the EIN Verification Letter (147c) comes in.
What Is an EIN Verification Letter (147c)?
If you’ve lost or misplaced the EIN Confirmation Letter (CP 575) the IRS issued to you when you originally applied for your business’s EIN, you can request an EIN Verification Letter (147c). This verification letter will enable you to confirm to third parties that your business has a valid EIN.
It's important to note that only a business’s owner or power of attorney can request a 147c letter from the IRS.
How to Obtain an EIN Verification Letter (147c)
You can only obtain an EIN Verification Letter (147c) by contacting the IRS directly for assistance over the phone. To request an EIN Verification Letter (147c), businesses can contact the IRS Business & Specialty Tax Line at 800-829-4933.
Business owners should be prepared to provide the necessary information, such as their business’s name, address, and EIN, to verify their identity. For security reasons, the IRS will never send an EIN Verification Letter (147c) by email.
Situations That Need EIN Verification
The following situations may require business owners to verify their EIN by submitting either an EIN Verification Letter (147c) or an EIN Confirmation Letter (CP 575) as proof of an existing EIN:
1. Opening a Business Bank Account: Banks often require businesses to provide an EIN Verification Letter (147c) when opening a new business account.
2. Applying for Credit: Businesses also may need to present this document when applying for lines of credit, loans, or other forms of financing.
3. Complying With State Regulations: Some states may require one of these letters to complete certain business filings.
4. Securing Insurance: Businesses may need to present this document when securing business insurance, such as general liability and professional liability insurance.
5. Filing Taxes: An EIN Verification Letter (147c) can prove useful when filing taxes with the IRS because it includes all of the necessary information about the business, including its legal name.
How to Keep Your EIN Up to Date
Once you obtain an EIN for your business, it’s essential to keep it up to date with the IRS. If any of the information associated with your EIN changes, such as your business’s name or address, you must notify the IRS to ensure your business remains compliant with federal tax laws.
The easiest and most efficient way to update your EIN information is to visit the IRS’ website and complete the necessary form(s). You’ll need your EIN, your business’s name and legal structure, and your updated information. Make sure to double-check and confirm that all the information is accurate before submitting the form(s).
It's important to note that changes to your business structure, such as converting from a C corporation to a limited liability company (LLC), may require a new EIN. In any case, it's best to consult with a tax professional to ensure you follow the appropriate protocols and avoid any unnecessary penalties.
New to entrepreneurship? Check out our How to Start a Business guides to learn more.
