III. Information by type of business entity

Definition:

• An individual operating a business.
• The business does not exist separately from the owner.
• The individual accepts the risks of business to the extent of all their assets, whether used in the business or used personally.
• A Sole Proprietor is an individual, husband or wife co-owner who owns a business.
• The business may or may not have employees.
• This type of entity will report its business income on Schedule C of the sole proprietor's individual tax return.

NOTE:An individual who pays wages to a household (domestic) employee must request an EIN as a sole proprietor.

Forms(s):

Business profits or losses are reported on Form 1040-Schedule C, Schedule C-EZ, or Schedule F. A sole proprietor may also be required to file other returns that apply (such as employment tax returns).

You will need a new EIN if:

• You file bankruptcy under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the Bankruptcy Code or filed Form 8832 to elect corporate status for your Limited Liability Company (LLC).
• You incorporate.
• You are a Sole Proprietor and take in partners and operate as a partnership.
• You are establishing a pension, profit sharing, or retirement plan

You do not need a new EIN if:

• You change the name of your business.
• You change your location or add locations (stores, plants, enterprises or branches of the entity).
• You operate multiple businesses (including stores, plants, enterprises or branches of the entity).

NOTE:You may not transfer your EINif you sell or otherwise transfer your business. The new operator may not use your EIN. You can't use the EIN of the former owner, even if it is your spouse.

NOTE:A Sole Proprietor who conducts business as a Limited Liability Corporation (LLC) does not need a separate EIN for the LLC. He or she reports the business activities of the LLC on his or her Form 1040 using a schedule C, Schedule C-EZ or Schedule F.

Definition:

• A person or group of people who incorporate by receiving a charter from their Secretary of State.
• Includes associations, joint stock companies, insurance companies, and trusts and partnerships that operate as associations or corporations.

Form(s):

Corporations usually file a Form 1120 series return plus other returns that apply (such as employment tax returns).

The Form 1120 series returns are as follows:

• Form 1120, U.S. Corporation Income Tax Return
• Form 1120 A, U.S. Corporation Short-Form Income Tax Return
• Form 1120 SF, U.S. Income Tax Return for Designated Settlement Funds (Under section 468B)
• Form 1120 F, U.S. Income Tax Return of a Foreign Corporation
• Form 1120 FSC, U.S. Income Tax Return of a Foreign Sales Corporation
• Form 1120 H, U.S. Income Tax Return for Homeowners Associations
• Form 1120 L, U.S. Life Insurance Company Income Tax Return
• Form 1120 ND, Return for Nuclear Decommissioning Funds and Certain Related Persons
• Form 1120 PC, U.S.Property and Casualty Insurance Company Income Tax Return
• Form 1120 POL, U.S. Income Tax Return for Certain Political Organizations
• Form 1120 REIT, U.S. Income Tax Return for Real Estate Investment Trusts
• Form 1120 RIC, U.S. Income Tax Return for Regulated Investment Companies
• Form 1120S, U.S. Income Tax Return for an S Corporation

You will need a new EIN if:

• You are a subsidiary of a corporation and currently use the parent's corporate EIN.
• You become a subsidiary of a corporation.
• The corporation becomes a partnership or a sole proprietorship.
• You create a new corporation after a statutory merger.
• You move to another state and apply for a new corporate charter.
• The corporation went out of business and reopened with a new charter.

You do not need a new EIN if:

• You are a division of a corporation. .
• After a corporate merger, the surviving corporation uses its existing EIN.
• A corporation declares bankruptcy.
• Your business name changes.
• You change your location or add locations (stores, plants, enterprises or branches).
• You choose to be taxed as a S Corporation.
• After a corporate reorganization, you only change identity, form, or place of organization.

NOTE:IRS assigns an EIN to a corporation and the EIN stays with the corporation if it is sold.

Definition:

• A partnership is the relationship existing between two or more persons who join together to carry on a trade or business. Each partner contributes money, property, labor or skill, and expects to share in the profits and losses of the business.
• Partners can be individuals, corporations, trusts, estates and other partnerships.

Form(s):

• A partnership files Form 1065, U.S. Partnership Return of Income, plus other returns that apply (e.g., employment tax returns).

You will need a new EIN if:

• You incorporate.
• One partner takes over and operates as a sole proprietorship.
• The partnership is terminated (no part of any business, financial operation, or venture of the partnership continues to be carried on by any of its partners in a partnership) and a new partnership is begun.

You do not need a new EIN if:

• 50 percent or more of the ownership of the partnership (measured by interests in capital and profits) changes hand within a twelve-month period (terminated partnerships under Reg. 301.6109-1).
• A partnership declares bankruptcy.
• The partnership name changes.
• You change the location of the partnership or add locations.
• A new partnership that is formed as a result of the termination of a partnership under section 708(b)(1)(B) will retain the employer identification number of the terminated partnership.

Definition:

• An estate is created upon the death of an individual.
• A decedent's estate is a separate legal entity for federal tax purposes.
• An estate consists of real and/or personal property of the deceased person.

Form(s):

• Estates file either Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return; or
• Form 1041, U.S. Fiduciary Return of Income, plus other returns that apply (such as employment tax returns).

You will need a new EIN if:

• A trust is created with estate funds. Such a trust is not simply a continuation of the estate.
• An estate is created as a direct result of a person's death.
• You represent an estate that operates a business after the owner's death.

You do not need a new EIN if:

• The administrator, personal representative, or executor changes a name or address.
• The beneficiaries or the executor of an estate changes.

Definition:

• A trust (except for a grantor type trust) is a separate legal entity for federal tax purposes.
• A trust may be created during an individual's life or upon a death under a will.
• Includes guardianships, conservatorships, and Government National Mortgage Association (GNMA) and Federal National Mortgage Association (FNMA) pools.
• A trust is created under State law.
• The trust is taxed under federal law in which one party holds assets for the benefit of another. This includes guardianships, conservatorships, and GNMA and FNMA pools.

Form(s):

• Form 1041, U.S. Fiduciary Return of Income, plus other returns that apply (such as employment tax returns).

You will need a new EIN if:

• A trust changes to an estate.
• A living or intervivos trust changes to a testamentary trust.
• A living trust terminates by distributing its property to a residual trust.

You do not need a new EIN if:

• The trustee changes.
• The grantor or beneficiary changes his or her name or address.
• A bankrupt Partnership establishes an escrow account for settlement funds, or similar funds to liquidate or distribute assets.

You need a separate EIN if:

• One person is the grantor/maker of many trusts. Separate trusts that are commingled to administer assets must file separate returns and have separate EINs. For example, if you have a trust for each of your grandchildren, each trust must have a separate EIN. However, a single trust with several beneficiaries has only one EIN.

Definition:

• A permanent arrangement under which an employer provides benefits for employees.
• The employer/sponsor and/or the plan administrator file the applicable returns.

Sponsor:

The employer/sponsor may be one of the following entity types:

• An employer, when a single employer establishes or maintains an employee benefits plan.
• An employee organization, when an employee organization establishes or maintains a plan.
• An association, committee, joint board of trustees or similar group of representatives who establish or maintain the plan.

Administrator:

• The administrator is the person or group of persons specifically designated as plan administrator in the documents under which the plan operates.
• We issue an administrator EIN to a person, a group of persons, a business, or a corporate entity. If the administering entity already has an EIN, use that number for the administrator on all Form 5500 returns.

Form(s):

Employee plans usually file a Form 5500 series return plus other returns that apply (such as employment taxes). The major employee plan forms are listed below:

• Form 5500, Annual Return/Report of Employee Benefit Plan (with 100 or more participants)
• Form 5500 C/R, Return/Report of Employee Benefit Plan (with fewer than 100 participants)
• Form 5500 EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan.

NOTE:For more information on employee plans call our toll-free number 1 -800-TAX-FORM and ask for Package 5500.

NOTE:If the employer/ sponsor entity already has an EIN, use that number on all Form 5500 series returns.

Definition:

• A nonprofit organization granted an exemption from certain taxes by the Internal Revenue Service under Section 501 of the Internal Revenue Code.
• Organizations seeking exempt status must file an application with the Internal Revenue Service using the address shown on the Form 8718, User Fee for Exempt Organization Determination Letter Request.

NOTE:To decide which application form is needed for your organization refer to Publication 557, Tax -Exempt Status for Your Organization.

NOTE:All nonprofit organizations must apply for an EIN before filing for exempt status.

Form(s):

Exempt organizations usually file a Form 990 series return plus other returns that apply (such as employment tax returns). The exempt organization forms are listed below:

• Form 990, Return of Organizations Exempt From Income Tax
• Form 990 EZ, Short Form Return of Organization Exempt From Income Tax
• Form 990 BL, Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons
• Form 990 C, Farmers Cooperative Association Income Tax Return
• Form 990 PF, Return of Private Foundation or Section 4947(a)(1)
• Charitable Trusts Treated as a Private Foundation
• Form 990 T; Exempt Organization Business Income Tax Return
• Form 4720; Return of Certain Excise Taxes on Charities and Other Persons under Chapters 41 and 42 of the Internal Revenue Code
• Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt from Federal Income Tax

You can get Publication 557 or applications for exempt status from the IRS Forms Distribution Center for your state or by calling our toll-free number, 1-800-TAX FORM.