Do I Need To Cancel My EIN If I Close My Business?

After your business closes, nothing happens to your Employer Identification Number (EIN). The EIN remains the same and is a permanent identifier for that specific business. According to the IRS, an EIN is a “permanent Federal taxpayer identification number for that entity”.

When You Close Your Business

There are some key things to keep in mind regarding what to expect when your business closes and your EIN: 

• Your EIN cannot be canceled, even if your business closes down or is administratively dissolved. 
• The IRS cannot cancel EIN numbers, but if you have an IRS business account associated with the EIN, this may be closed. An IRS business account is used to view your tax information on record with the IRS and can be accessed by sole proprietorships who file with an EIN, and partnerships and s-corporations who have a SSN/ITIN and a schedule K-1 on file from between 2017-2022.
• If the EIN is needed in the future, it will still belong to the specific business entity it was assigned to. 
• If you have an IRS business account, you need to send a letter that includes the complete legal name of the business, the business EIN, the business address, and the reason why you wish to close the account. 
• Canceling/deactivating an EIN with the IRS is technically called “Closing a Business Account”. 

Can I Cancel an EIN?

You cannot cancel an EIN. Once an EIN is assigned, it remains associated with the business entity or individual it was issued to. However, if you no longer need the EIN, you can request that it be revoked by the IRS. This can be done by filing Form 966, Corporate Dissolution or Liquidation, or Form 2553, Election by a Small Business Corporation. 

You should ensure that the contents of this letter is entirely correct so that the IRS is aware of the correct business from which the EIN needs to be revoked. 

EIN Cancellation FAQs

Can I re-use my EIN later on? 

Yes, you can reuse your EIN if you reopen your business. You will have access to your EIN again if you decide to restart your business, as an EIN cannot be canceled.

How can I cancel my IRS business account? 

To cancel your IRS business account associated with your EIN, you need to send a letter to the IRS that includes the complete legal name of the business. This will close the business account associated with the EIN, but it does not cancel the EIN itself.

Can I use my EIN for another business? 

Generally, you cannot use your EIN for another business, however there are a few exceptions in which your business can keep the same EIN: 

• If you are changing your business name.
• If you change your business location or add a new location.
• Specific circumstances related to your business structure.

Conclusion

Understanding the status of your EIN after your business closes is crucial for tax compliance and official transactions. Although you cannot cancel an EIN, you can request that it be revoked by the IRS if you no longer need it. Additionally, you can re-use your EIN for another business venture or use it for tax filings related to a closed business.