Getting an EIN for Free: Avoiding Costly Scams
Learn how to get an IRS Employer Identification Number for free and steer clear of companies that charge needless fees.
Starting a business or nonprofit often requires an Employer Identification Number (EIN), but many owners do not realize that this crucial tax ID is completely free when requested directly from the Internal Revenue Service (IRS). Paid websites sometimes imply that you must buy an EIN as part of an “official” package, turning a no-cost step into an unnecessary expense.
This guide explains what an EIN is, who needs one, the legitimate ways to apply at no charge, and how to recognize and avoid common EIN-related scams.
What an EIN Is and Why It Matters
An Employer Identification Number is a unique nine-digit identifier issued by the IRS to businesses, nonprofits, estates, trusts, and other entities for tax administration purposes. It is sometimes called a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number.
| Identifier | Used For | Issued By |
|---|---|---|
| EIN | Business and organizational tax reporting | IRS (United States) |
| SSN | Individual tax reporting and benefits | Social Security Administration |
| ITIN | Tax ID for certain individuals not eligible for SSN | IRS |
Think of the EIN as the Social Security Number for your organization: it allows the IRS and other institutions to recognize your business as distinct from you personally.
Typical Uses of an EIN
You may need to provide your EIN in many routine business situations, such as:
- Filing federal business tax returns and other IRS forms.
- Hiring and paying employees, including reporting payroll and employment taxes.
- Opening a business bank account or merchant services account.
- Applying for state or local business licenses and permits.
- Working with wholesalers, large vendors, or government grant systems that require a federal tax ID.
Who Actually Needs an EIN?
The Future of AI: Preventing a Big Tech Monopoly >
Not every business structure is legally required to obtain an EIN, but many are. According to the IRS and legal guidance, you must get an EIN if any of the following apply:
- Your business has one or more employees.
- Your entity is a corporation or a partnership.
- You file employment, excise, or certain other special tax returns.
- You withhold taxes on income (other than wages) paid to a nonresident alien.
- You administer certain retirement plans, such as a Keogh plan.
- You are a trust, estate, nonprofit, or similar type of organization.
In addition, the IRS specifically notes that every organization in the exempt sector (for example, charities, social clubs, and many other nonprofits) must have its own EIN, even if it has no employees.
When You Might Not Need an EIN
A solo entrepreneur operating as a sole proprietorship with no employees can sometimes use their Social Security Number instead of applying for an EIN. Still, many banks, vendors, and state agencies prefer or require an EIN, so some sole proprietors choose to obtain one voluntarily to separate personal and business activity.
How to Get an EIN Directly from the IRS for Free
The IRS is the only authority that issues EINs. Applying directly through the IRS is free and can often be completed in minutes using the online application for eligible applicants.
Timing Your Application
Legal and tax guidance consistently recommends applying for an EIN after your business entity has been formed but before you begin routine operations like hiring or filing business tax returns. That way the information you submit to the IRS (such as entity type and start date) matches your foundational documents.
Official Application Methods
Per IRS instructions, you can request an EIN in several ways, depending on where your entity was formed and your preferred communication method.
- Online application (fastest for U.S.-based entities, when available).
- Mail by sending a completed Form SS-4.
- Fax of Form SS-4 to the appropriate IRS number.
- Telephone application for certain entities formed outside the United States or its territories.
All these methods are provided by the IRS at no cost; third parties may charge to help you complete the paperwork, but that does not change the fact that the EIN itself is free.
Key Information You Will Need
Whether you apply online or with Form SS-4, you should be ready to provide detailed information about your entity, such as:
- Legal name of the business or organization.
- Trade name or “doing business as” name (if any).
- Type of entity (corporation, partnership, sole proprietorship, LLC, trust, nonprofit, etc.).
- Reason for applying (starting a new business, hiring employees, banking requirement, change in ownership, etc.).
- Date the business started or was acquired.
- Principal business activity and industry.
- Primary contact person, their title, and tax ID (often the responsible party).
Providing accurate information at the outset helps avoid processing delays and later complications if the IRS needs to correct or verify your records.
How Scammers Turn a Free EIN into a Paid “Service”
Because many new business owners are under time pressure and unfamiliar with the tax system, scammers and some aggressive marketers exploit that confusion by presenting fee-based EIN acquisition as if it were necessary or officially endorsed.
Common Misleading Tactics
While some companies openly state that they are third-party service providers, others use tactics that can easily cause confusion, such as:
- Official-looking branding that mimics government sites, including seals, flags, or color schemes similar to IRS pages.
- Domain names that suggest they are part of the government (for example, using phrases like “federal tax ID” alongside patriotic imagery), even though they are private businesses.
- Bundled packages where the EIN application is just one small component, but the overall fee is marketed as a necessary step to “register” with federal authorities.
- Urgency and fear in marketing language, implying you could face penalties or delays if you do not act immediately and purchase their “expedited” service.
None of these strategies changes the underlying fact: the IRS will issue an EIN directly to you for free, and you do not need to pay any subscription, processing, or “registration” fee to receive it.
When Paying a Professional Might Be Reasonable
There are legitimate reasons to hire a professional, such as a tax advisor or attorney, to handle complex entity formation and related filings on your behalf. In that context, requesting an EIN may be only one part of a broader service package. However, a professional should be transparent about what you are paying for and should not claim that paying a fee is required to obtain an EIN itself.
Red Flags: How to Spot EIN-Related Scams
To protect your business, watch for these warning signs when you search online or receive unsolicited offers:
- Requests for payment that are framed as government-mandated fees for an EIN.
- Guarantees of special access or faster processing than the IRS provides; the IRS does not sell priority EIN issuance.
- Refusal to identify the company clearly or provide full contact information.
- Vague explanations about what is included in the fee, or heavy emphasis on urgency and penalties without clear citations to law or IRS rules.
- Unsolicited emails, texts, or calls claiming you must obtain an EIN immediately—especially if you never started an application.
If you suspect a site or service is misrepresenting its relationship to the government, navigate directly to irs.gov or to official small business resources described below, rather than clicking on ads or promotional links.
Protecting Your Information When Applying for an EIN
Although an EIN is not treated as confidential in the same way an individual’s Social Security Number is, you may still transmit sensitive information during the application process, including identification details about the responsible party. It is important to keep security in mind.
Best Practices for Safe Applications
- Use only official IRS channels (direct navigation to irs.gov rather than following random links).
- Ensure your internet connection is secure (for example, avoid public Wi-Fi when submitting tax-related forms).
- Retain a copy of your EIN confirmation notice for your records and for future banking, licensing, or grant applications.
- Be cautious about sharing your EIN with unfamiliar third parties who do not clearly need it.
Correcting Mistakes or Changes After You Get an EIN
Over time, your business might undergo changes—such as a new legal name, different ownership, or a shift in entity type—that require updates to your IRS records or even a new EIN. The IRS provides procedures to:
- Change mailing addresses or responsible party information.
- Update business names when you legally change them.
- Determine whether a restructuring event requires a new EIN or just an update to existing records.
These adjustments are also handled directly with the IRS without third-party “registration” fees.
Legitimate Help for Small Businesses and Nonprofits
If you need guidance on whether you require an EIN or how it fits into your broader startup tasks, several official resources can help:
- The IRS offers detailed online guidance about who needs an EIN, how to apply, and how to use it.
- The U.S. Small Business Administration (SBA) explains how EINs fit into the overall process of getting federal and state tax ID numbers when launching a business.
- State-level small business development centers, often linked through universities or economic development agencies, provide free or low-cost counseling on entity formation and tax basics.
Quick Checklist: Getting Your EIN the Right Way
Use this brief checklist to stay on track and avoid unnecessary costs:
- Confirm whether your business or organization needs an EIN under IRS rules.
- Form your legal entity (if required) before applying, so your IRS information is accurate.
- Gather key details, including legal name, responsible party, start date, and business activities.
- Apply directly with the IRS using the online system, mail, fax, or authorized phone process.
- Ignore or decline offers that present paid EIN acquisition as a government requirement.
- Save your EIN confirmation notice and share the number only with institutions that legitimately need it.
Frequently Asked Questions About EINs and Fees
Is there ever a government fee to obtain an EIN?
No. The IRS issues Employer Identification Numbers at no cost, regardless of the method you use to apply. Any fee you see is charged by a private third party, not the government.
How long does it take to get an EIN from the IRS?
For eligible entities using the IRS online application, the EIN is typically issued immediately once the form is completed and submitted successfully. Mail and fax methods may take longer because they require manual processing.
Can I use my Social Security Number instead of an EIN?
Some sole proprietors without employees may use an SSN for tax reporting instead of applying for an EIN. However, if you hire employees, form a corporation or partnership, or meet other IRS criteria, you will need an EIN.
Do nonprofits need an EIN even if they have no employees?
Yes. The IRS states that every organization must have an EIN, even if it will not have employees, because the EIN is how the IRS identifies the organization for tax and information reporting purposes.
What should I do if I paid a company to get an EIN and feel misled?
If the company clearly disclosed that it was a paid third-party service, it may be a matter of dissatisfaction rather than fraud. If you believe the business misrepresented itself as a government agency or implied that payment was mandatory, you can consider reporting your experience to consumer protection authorities and, going forward, apply directly with the IRS.
References
- Employer Identification Number (EIN) — Internal Revenue Service. 2024-01-18. https://www.irs.gov/businesses/employer-identification-number
- Employer Identification Number — Internal Revenue Service (Charities and Nonprofits). 2023-11-15. https://www.irs.gov/charities-non-profits/employer-identification-number
- Get Federal and State Tax ID Numbers — U.S. Small Business Administration. 2023-09-01. https://www.sba.gov/business-guide/launch-your-business/get-federal-state-tax-id-numbers
- Employer Identification Number (EIN) — Legal Information Institute, Cornell Law School. 2021-06-01. https://www.law.cornell.edu/wex/employer_identification_number_(ein)
- Understanding EIN: Your Guide to Federal Tax ID Numbers — Wolters Kluwer. 2022-10-12. https://www.wolterskluwer.com/en/expert-insights/obtaining-a-federal-tax-id-ein
- Employer Identification Number (EIN) — Justice Grants, U.S. Department of Justice. 2023-04-07. https://justicegrants.usdoj.gov/taxonomy/term/employer-identification-number-ein
Similar Articles
Read full bio of Sneha Tete
