Under what circumstances am I required to obtain a new employer identification number (EIN)?

You are required to obtain a new Employer Identification Number (EIN) under the following circumstances:

1. Change in Business Structure:
   • If you incorporate your business.
   • If a sole proprietorship takes in partners and operates as a partnership.
   • If a partnership changes to a corporation or a sole proprietorship.
   • If a corporation changes to a partnership or a sole proprietorship.
   • If a limited liability company (LLC) changes its classification (e.g., from a disregarded entity to a corporation).
2. Change in Ownership:
   • If an existing business is purchased or inherited by an individual who will operate it as a sole proprietorship.
   • If a sole proprietorship changes ownership to another individual.
   • If a partnership changes ownership to an individual owner or another partnership.
   • If a corporation changes ownership to an individual owner or another corporation.
3. Bankruptcy and Receivership:
   • If a sole proprietorship files for bankruptcy under Chapter 7 (liquidation) or Chapter 11 (reorganization).
   • If a corporation or partnership establishes a liquidating trust in bankruptcy.
   • If a business enters receivership.
4. Creation of New Entities:
   • If you create a new corporation after a statutory merger.
   • If you receive a new corporate charter.
   • If a trust changes to an estate, a living trust changes to a testamentary trust, or a revocable trust changes to an irrevocable trust.
5. Establishment of Pension, Profit Sharing, or Retirement Plans:
   • If a sole proprietorship establishes a pension, profit sharing, or retirement plan.
6. Special Situations for Trusts:
   • If a trust that is treated as owned by one or more persons under sections 671 through 678 no longer meets the exception criteria and must obtain a taxpayer identification number.
   • If a trust terminates a section 645 election and there is no executor, the trustee must obtain a new taxpayer identification number.
7. Subsidiaries and Corporate Changes:
   • If you are a subsidiary of a corporation and currently use the parent's corporate EIN.
   • If you become a subsidiary of a corporation.
   • If a qualified subchapter S subsidiary (QSub) election terminates and the entity did not have an EIN prior to becoming a QSub.
8. Other Specific Situations:
   • If a partnership is terminated and a new partnership is begun.
   • If a single owner entity that was disregarded as an entity separate from its owner becomes recognized as a separate entity for federal tax purposes and did not already have its own EIN.

In summary, a new EIN is generally required when there is a significant change in the structure, ownership, or legal status of the business entity. This ensures that the IRS can accurately track and manage tax obligations and filings for the newly constituted entity.

Sources:
Publication 1635 (2/2014)
§ 301.6109-1. Identifying numbers.
Rev. Proc. 2018-15
Rev. Proc. 2009-41
Publication 4485 (9/2023)