As most know, you have been able to obtain an EIN online through the IRS for new businesses. The process was fairly confusing, however, because the IRS essentially just put a form online. That has all changed.

Just so we are clear, EIN stands for employee identification number. It is essentially the equivalent of a social security number for a person. If you want to form a corporation or limited liability company, you must have an EIN.

The IRS has always had a strong online presence and an excellent website. This is a bit shocking to most taxpayers who think of the agency as technologically backwards. Regardless, some parts of the site have been better than others.

When it came to applying online for an EIN, the IRS site was not so great. The agency had essentially pasted the application form on a page without providing easy access to instructions or help. As a result, many filled the form out incorrectly. Once the IRS started sending the wrong forms, the mistake was discovered and then had to be corrected.

The IRS has taken note of the problem and made changes to the EIN application process. No longer is there a blank form. Instead, the application process is now done in a question and answer format. The IRS, of course, speaks in a strange language, so help is provided at each step should you get confused.

Once you provide all the answers to the questions, the site kicks out an EIN instantaneously. It is absolutely vital that you write the number down immediately and print it out. You cannot come back to the screen and more than a few people have learned this the hard way. If you lose the number, do not re-apply for a new EIN. Instead, call the IRS to get it.

If you need to obtain a new employee identification number, it has never been easier. Just know what business entity you have and then visit the site of the IRS. Search for “EIN” and you should be taken to the application section.

Written by Richard A. Chapo

Richard A. Chapo helps people incorporate in California. Contact him at SanDiegoBusinessLawFirm.com.