1. Choosing the Wrong Business Entity Type
Selecting an incorrect entity type (LLC, sole proprietor, partnership, corporation) is one of the most frequent mistakes. The IRS uses this information to determine your tax obligations.
Tip: Confirm your legal business structure before applying.
2. Using an Incorrect Responsible Party
The responsible party must be an individual who controls or manages the business—not another company. Using a nominee or third party incorrectly can invalidate your application.
Tip: Enter the owner or principal officer’s name and SSN/ITIN (or “foreign” if applicable).
3. Applying for an EIN Too Early
Many businesses apply before legally forming their entity with the state. This mismatch can cause issues later.
Tip: Complete state registration first, then apply for your EIN.
4. Submitting Duplicate EIN Applications
Applying multiple times for the same business often leads to confusion and IRS flags.
Tip: Apply once and wait for confirmation before reapplying.
5. Entering an Incorrect Business Name
Your EIN application must exactly match your legal business name as registered with the state.
Tip: Double-check spelling, punctuation, and suffixes like LLC or Inc.
6. Providing the Wrong Start Date
Using an incorrect business start date may affect tax filing and compliance timelines.
Tip: Use the date your business officially began operations or was formed.
7. Misunderstanding When a New EIN Is Required
Not all business changes require a new EIN—but some do, such as changing from a sole proprietorship to a corporation.
Tip: Review IRS guidelines before reusing or replacing an EIN.
8. Foreign Applicants Using the Online Form Incorrectly
Non-US residents often attempt the online application when they are not eligible.
Tip: Foreign applicants without an SSN or ITIN should use Form SS-4 instead.
9. Not Saving the EIN Confirmation Letter
Losing your EIN confirmation letter (CP 575) can slow down banking and tax filings.
Tip: Save digital and printed copies immediately after approval.
01. Using an EIN for Personal Purposes
An EIN is strictly for business or entity use. Mixing personal and business identifiers can cause tax complications.
Tip: Use your SSN for personal matters and your EIN only for business.
11. Failing to Update the IRS After Changes
Address, ownership, or responsible party changes must be reported to the IRS.
Tip: Notify the IRS promptly to keep your EIN records accurate.
Final Thoughts
Avoiding these common EIN application mistakes ensures smoother tax filings, faster bank account setup, and better compliance with IRS regulations. Taking a few extra minutes to verify your information can prevent costly corrections later.