Requirement for Tax ID Numbers
Tax identification numbers are primarily used to file tax returns, but some ID numbers are also used to document wages, process credit and debt information, and secure other forms of identification. All tax ID numbers consist of nine digits, so it may be difficult to distinguish the type of ID number assigned simply by looking at it. Each type carries separate criteria concerning who it can be assigned to and how to apply for the number.
Social Security Number
A Social Security number is the most common individual taxpayer ID number, and it is also the only tax ID number not issued by the Internal Revenue Service. A person must use an SSN to file personal income taxes if one has been assigned. To receive an SSN, a person must be a U.S. citizen or legal alien resident. Applications for SSNs are submitted on Form SS-5 through local Social Security offices. When an application is submitted, proof of citizenship or legal residence and verification of age and identity must be provided. Documents that can be used to prove age and identity include driver's licenses, passports and birth certificates.
Individual Taxpayer Identification Number
An individual taxpayer identification number is issued to resident and nonresident aliens who aren't eligible for a Social Security number. An ITIN is used to file tax returns and other tax-related documents. To apply for one, the applicant must submit IRS Form W-7. Documents proving the identity and foreign status of the applicant must accompany the form. Any local IRS office or authorized IRS acceptance agent can accept the application. Filers who use an ITIN may not claim the earned-income tax credit.
Adoption Taxpayer Identification Number
An adoption taxpayer identification number is available to adoptive parents who are in the process of adopting a child. In some cases, an adopted child may be ineligible to receive an SSN by the time an adoptive parent is eligible to claim the child on a tax return. Applications for ATINs are processed by the IRS on Form W-7A. A copy of the placement agency agreement, court placement order or hospital release authorization must accompany the application. ATINs are temporary numbers and must be replaced with an SSN when the child becomes eligible to receive one.
Employer Identification Number
An employer identification number is issued by the IRS to any business that requests one. Business structures such as corporations, partnerships and trusts are required to have an EIN. However, all business structures, including sole proprietorships and limited liability companies can have one. An EIN is used to report business income and expense activity and maintain other business related accounts such as bank accounts. An EIN serves as a way to identify a business or trust, similar to the way an SSN identifies a person. There are no other requirements to receive an EIN, other than one can only be issued to a business. EIN applications can be submitted on IRS Form SS-4 online, by fax, by mail or in person.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.