How to Close an EIN Number With the IRS for a Business

An Employer Identification Number (EIN) functions as a nine-digit tax identification number for businesses, similar to how a Social Security number identifies individuals. The Internal Revenue Service (IRS) utilizes this identifier to track business tax obligations, including payroll and business structures.
While an EIN is generally permanent, specific circumstances may necessitate formally closing the business account. Understanding when and how to properly close an EIN is important for business owners.

When to Close an EIN

Closing a business account linked to an EIN is generally appropriate when a sole proprietorship ceases all business operations. For example, if a sole proprietor retires and no longer conducts business activity, they would consider closing their EIN. Similarly, if a sole proprietorship changes its legal structure to a corporation or a partnership, a new EIN is typically required for the newly formed entity, making the old EIN account eligible for closure.

For corporations or partnerships, an EIN’s account should be closed when the entity is formally dissolved and no longer exists or conducts business. This applies when the business permanently shuts down. In such cases, the business must ensure all financial obligations are met before proceeding with the closure request.

An EIN itself is permanent and is never canceled or reassigned. Instead, the IRS deactivates or closes the business account with that EIN.

Therefore, an EIN should not be closed for minor changes such as a change in business name, a new business location, or an alteration in the type of business conducted. These situations only require updating IRS records, not closing the EIN’s account.

Essential Information for Closure

Before initiating the closure of an EIN’s business account, gather specific information for the IRS request. You will need the full legal name of the entity as registered with the IRS, the Employer Identification Number, and the complete business address. You must also state the reason for the closure, such as business cessation or dissolution, and provide the date the business ceased operations.

A prerequisite for the IRS to process an EIN closure request is the filing of all required federal tax returns. This includes final income tax returns, employment tax returns, or other applicable forms. The IRS must confirm that all tax obligations with that EIN have been met. Failure to file all necessary returns will prevent the closure of the EIN’s business account.

For example, if the business had employees, all Forms 941 (Employer’s Quarterly Federal Tax Return) or Form 944 (Employer’s Annual Federal Tax Return) must be filed through the date of final wage payments. Corporations must file their final income tax return, often Form 1120, and indicate that it is a final return. Ensuring compliance with all federal tax filings before submitting the closure request streamlines the process and avoids delays.

Submitting the Closure Request

The IRS requires all EIN closure requests to be submitted in writing via postal mail. There is no online or phone method available for this process.

The letter should be clear and concise, providing all the necessary details for the IRS to identify the business and understand the reason for the request.

The written request must include the full legal name of the entity, the specific Employer Identification Number, and the official business address. It should also explicitly state the reason for the business account closure, such as “business ceased operations” or “entity dissolved,” along with the exact date the business officially stopped conducting activity. Attaching a copy of the original EIN assignment notice, if available, can also be helpful.

The letter should be mailed to the Internal Revenue Service, Cincinnati, OH 45999. It is advisable to keep a copy of the letter for your records before mailing it. The IRS typically does not send an immediate confirmation of EIN closure. Processing times can vary, often ranging from 45 to 60 days, or potentially longer depending on IRS workload. If no communication is received within this timeframe, a follow-up inquiry may be necessary.