Use EIN to legitimately hide SSN from clients?


R

Rich Carreiro

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 (e-mail address removed)

<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
 
Ad

Advertisements

J

John L

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?)
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.
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)?
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. >>
<< ------------------------------------------------------- >>
 
S

Stuart Bronstein

Rich Carreiro said:
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)?
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. >>
<< ------------------------------------------------------- >>
 
B

Benjamin Yazersky CPA

Rich Carreiro said:
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?
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. >>
<< ------------------------------------------------------- >>
 
P

Paul Thomas, CPA

Rich Carreiro said:
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?
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. >>
<< ------------------------------------------------------- >>
 
R

Rich Carreiro

Paul Thomas said:
I might not fully understand what happened, but the EIN is
for her "business" or for the Solo 401K plan?
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".
If for her business, then she can utilize that EIN as you
are suggesting.
On the paperwork to open the solo 401(k), the EIN was
used in the "Employer information" block.

--
Rich Carreiro (e-mail address removed)

<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
 
S

Stuart Bronstein

Rich Carreiro said:
"Paul Thomas, CPA" <paulthomascpapc@bellsouth.net> writes:
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.
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. >>
<< ------------------------------------------------------- >>
 
J

John L

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?
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. >>
<< ------------------------------------------------------- >>
 
Ad

Advertisements

R

Rich Carreiro

Stuart Bronstein said:
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?
I have no idea. That's what I'm trying to find out.

--
Rich Carreiro (e-mail address removed)

<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
 
P

Paul Thomas, CPA

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?
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. >>
<< ------------------------------------------------------- >>
 
S

Stuart Bronstein

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.
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. >>
<< ------------------------------------------------------- >>
 
H

Harlan Lunsford

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.
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. >>
<< ------------------------------------------------------- >>
 
H

Harlan Lunsford

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?
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. >>
<< ------------------------------------------------------- >>
 
Ad

Advertisements

Joined
Apr 29, 2015
Messages
13
Reaction score
0
Country
United States
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
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

USA EIN or SSN? 1
EIN vs. SSN 11
Which SSN to use 1
EIN vs. SSN (different numbering space) 22
Using TIN or SSN Question 1
EIN formatted as SSN on received 1099-MISC -- Problem? 7
Using client software 9
Deductions legitimate? 16

Top