Use EIN to legitimately hide SSN from clients?

Discussion in 'Tax' started by Rich Carreiro, Jun 28, 2007.

  1. A relative (a published author) is going to be doing some
    consulting. She does plan to talk to a lawyer and a tax pro
    about what form of business to ultimately use (consulting
    workshops she's gone to recommend creating either a S-Corp
    or a LLC because many companies, especially bigger ones, can
    be very reluctant to contract with an individual). However,
    for the near-term, she'll be a sole proprietor in her
    consulting work.

    Because of the book, she actually already is a sole
    proprietor. She has previously opened a solo 401(k). As part
    of opening that, she had to apply for an EIN because an EIN
    is explicitly needed for the "plan administrator" part of
    the solo 401(k) paperwork.

    Now, she's not thrilled about having to give out her SSN
    when she does her consulting gigs. Can she legitimately
    instead give out the EIN she already has? (And then would
    she put that EIN on her consulting Sched C?) If not, can she
    apply for another EIN (reason being "starting new business")
    and legitimately give that out to clients (and use it on the
    consulting Sched C)?

    Or is the only way to get out of giving out her SSN is to
    form a corp or LLC and have the entity contract with the
    client, giving the entity's EIN to the client?

    --
    Rich Carreiro

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    Rich Carreiro, Jun 28, 2007
    #1
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  2. Rich Carreiro

    John L Guest

    Now, she's not thrilled about having to give out her SSN
    I've been doing that for a decade, giving people a W-9 with
    my EIN, then reporting the income on Sched C with that EIN.
    Works fine for me.
    The IRS says that if you're a sole proprietor you use the
    same EIN for all your businesses.

    R's,
    John

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    John L, Jun 29, 2007
    #2
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  3. A sole proprietor is allowed to have an EIN and use it for
    the business. So I don't see why that would be a problem in
    her case.

    Stu

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Stuart Bronstein, Jun 29, 2007
    #3
  4. If it is a legitimate sch C, which could be an LLC, it can
    have its own EIN.

    ___________________________________
    <<< Benjamin Yazersky, CPA [NJ & NY] >>>
    -----> real address on hobokeni or hobokenx <-----

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Benjamin Yazersky CPA, Jun 29, 2007
    #4
  5. I might not fully understand what happened, but the EIN is
    for her "business" or for the Solo 401K plan?

    If for her business, then she can utilize that EIN as you
    are suggesting.

    If the EIN identifies the plan, then it can't be used by her
    business for business earnings.

    --
    Paul A. Thomas, CPA
    Athens, Georgia

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Paul Thomas, CPA, Jun 29, 2007
    #5
  6. To open a solo 401(k), (at least with Fidelity), the
    custodian requires that the "employer" have an EIN,
    even for sole proprietors. So she got an EIN. The
    "type of entity" given on line 8a was "sole proprietor"
    and the reason given on line 9 "created a pension plan".
    On the paperwork to open the solo 401(k), the EIN was
    used in the "Employer information" block.

    --
    Rich Carreiro

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Rich Carreiro, Jul 1, 2007
    #6
  7. So if you get an EIN for one purpose, you can't use it for
    another proper purpose, and have to get a second EIN for the
    same business entity?

    Stu

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Stuart Bronstein, Jul 2, 2007
    #7
  8. Rich Carreiro

    John L Guest

    So if you get an EIN for one purpose, you can't use it for another
    No, the IRS is quite clear that one entity has one EIN. For
    some reason they ask you why you want the EIN in the first
    place, but once you have it, you use it for anything the
    entity does.

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    John L, Jul 2, 2007
    #8
  9. I have no idea. That's what I'm trying to find out.

    --
    Rich Carreiro

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Rich Carreiro, Jul 2, 2007
    #9
  10. Nope. That EIN is for the business. They can use it to
    identify the business, for payroll reporting, etc and so on.

    --
    Paul A. Thomas, CPA
    Athens, Georgia

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Paul Thomas, CPA, Jul 2, 2007
    #10
  11. That's what I thought. I hope that settles the issue for Rich.

    Stu

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Stuart Bronstein, Jul 2, 2007
    #11
  12. But of course the solo 401k plan also gets its own and
    separate EIN.

    ChEAr$,
    Harlan Lunsford, EA n LA

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Harlan Lunsford, Jul 9, 2007
    #12
  13. Check; and double check.

    The business has its EIN, and the plan it's own/separate
    EIN.

    ChEAr$,
    Harlan Lunsford, EA n LA

    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Harlan Lunsford, Jul 9, 2007
    #13
  14. Rich Carreiro

    Kerry Claxton

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    The plan would have its own EIN but the administrator would take care of getting the plan EIN. As a sole proprietor the IRS only will issue ONE EIN for any and all businesses owned by the individual and that EIN would be used for the rest of the individuals life so do not ever lose the number, the IRS will not issue a 2nd EIN to an individual without jumping thru a lot of hoops. SMLLC can get a seperate EIN and may be required to if it has employees.

    Kerry Claxton, CPA
     
    Kerry Claxton, Apr 29, 2015
    #14
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