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An Employer Identification Number (EIN), also called a Federal Tax Identification Number, is a nine-digit number assigned to a business by the Internal Revenue Service (IRS) to serve as a unique identifier. This is comparable to the way in which individuals are identified by a Social Security Number (SSN). 

Businesses, such as corporations and partnerships, as well as sole proprietors, need an EIN to perform various financial and tax-related activities.

The need for an EIN for businesses is as follows:

• To open a bank account

• To obtain various business licenses

• To file tax returns

• To pay employees (for businesses with employees)

• To obtain credit

Without an EIN, a business would experience difficulties in its legal and financial operations. Even if you do not have employees, you need to apply for an EIN for federal tax purposes, such as excise tax returns filed on Form 720, which include foreign insurance taxes.

For a detailed guide and more information, refer to the IRS pages:

https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number

https://www.irs.gov/businesses/employer-identification-number#international

The process of applying for an EIN is quite simple, and there are 3 ways of doing so. You can apply for an EIN by fax, mail, or online. The selection of the medium of application is dependent upon the individual’s preferences and eligibility.

1. Fax Application

If you want to apply for an EIN by fax, you must fax the Form SS-4, which you have filled out, to the IRS. You should use this method only if you are located outside the United States or U.S. territories.

First, you need to fill out the Form SS-4, which is the application form for the Employer Identification Number. You then need to fax the form to the IRS at the below fax numbers which is also indicated on the IRS website.

Within four business days, the IRS will send the EIN via fax.

FAX Number:

U.S. States or District of Columbia: Fax to 855-641-6935

U.S. Territories or International (within U.S.): Fax to 855-215-1627

International (outside U.S.): Fax to 304-707-9471

2. Mail Application

If you want to apply for an EIN by mail, you need to fill out the Form SS-4 and send it to the IRS office. The mailing address varies, and you need to check the IRS website for the address.

It takes around four to six weeks for the IRS to send the EIN by mail.

3. Online Application (Fastest and Free)

Step 1 - Open the page for the IRS to apply for an EIN: Apply for an EIN Online

Step 2 - Click "Begin Application Now" to get started.

Step 3 - You will be prompted to enter detailed information into the application, such as:

Legal Structure: Enter whether you are a sole proprietor, partnership, corporation, etc.

Identity: Enter your personal details if you are the responsible individual for the business.

Address Information: Enter your business’s physical and mailing addresses.

Other Details: Enter additional details regarding your business’s structure and purpose.

Any legal entity that is required to pay federal taxes can apply for an EIN. This includes:

• Sole proprietors

• Partnerships

• Corporations (for-profit and non-profit)

• LLCs

• Estates and trusts

• Foreign businesses

If you're a non-U.S. resident or non-citizen and want to apply for an EIN for a business in the U.S. for the payment of excise taxes on Form 720, you can do so by following the same procedure as mentioned above, although the procedure for fax or mail application differs depending on the country of residence.

No Third-Party Fees: While looking for third-party services to assist in the application of an EIN, it is recommended to be careful. Any third-party service charging a fee for the application of an EIN is not recommended. This is because such services are not authorized by the IRS. Instead, it is recommended to use the official website of the IRS to get the required services for free.

EIN for Foreign Entities: Foreign entities must comply with the following guidelines while applying for an EIN. This is particularly important for entities not located within the U.S. In such cases, it is recommended to make use of the fax and mail options.

Conclusion

Obtaining an EIN is a critical aspect for businesses, both domestic and international, especially when filing Form 720 for foreign insurance taxes. The IRS provides different options for applying for an EIN online, via fax, or by mail, making it a fast and easy procedure for businesses to comply with tax regulations.