How to Verify a Tax ID Number for a Business

A Tax Identification Number (TIN) is a unique identifier used by the Internal Revenue Service (IRS) to track individuals and entities for tax purposes. Verifying a TIN helps prevent fraud, ensures accurate reporting, and maintains financial transaction integrity. This process supports legal compliance and helps avoid potential penalties associated with incorrect information. Businesses, for example, must ensure the TINs of their vendors and employees are accurate to properly fulfill reporting requirements, such as issuing Form 1099 or Form W-2. Accurate TINs are also important for individuals when dealing with financial institutions or applying for certain government benefits.

Understanding Tax Identification Numbers

Tax Identification Numbers (TINs) are unique numerical identifiers issued by the Social Security Administration (SSA) or the IRS. Several types of TINs exist, each serving a distinct purpose for individuals and businesses within the U.S. tax system.

The Social Security Number (SSN) is a nine-digit number issued by the SSA. It primarily tracks individual earnings histories to determine eligibility and levels for Social Security benefits. Beyond its original purpose, the SSN has become a widely used identifier for individuals in various contexts, including employment, opening financial accounts, and applying for loans.

The Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the IRS to business entities. It serves as a business’s identifier for tax filing and reporting purposes. Most businesses, including corporations, partnerships, and multi-member LLCs, must obtain an EIN, especially if they have employees or file certain tax returns. Businesses also use EINs to open bank accounts and apply for business licenses and loans.

The Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the IRS to individuals who need a U.S. taxpayer identification number but are not eligible for an SSN. ITINs are primarily for federal tax purposes, allowing foreign nationals and others to comply with U.S. tax laws. This nine-digit number always begins with “9” and has a format similar to an SSN. An ITIN does not authorize work or provide eligibility for Social Security benefits.

Verifying Employer Identification Numbers

Verifying an Employer Identification Number (EIN) is important for businesses to ensure accurate tax reporting and compliance. To initiate an EIN verification, you need the business name, the EIN, and the business address.

The IRS offers the TIN Matching Program, allowing authorized payers to verify name and TIN combinations provided by vendors or contractors against IRS records. This program helps reduce errors on tax forms and minimizes the risk of penalties. Participants can check TINs against the IRS database to avoid issues like backup withholding, which is 24% of reportable payments if a correct TIN is not provided. This program is available to those who file certain Forms 1099, such as:
1099-B
DIV
INT
MISC
NEC
OID
1099-K
G
PATR

Requesting a completed Form W-9, Request for Taxpayer Identification Number and Certification, from a vendor or contractor is a primary method for EIN verification. This form captures the vendor’s legal name, business name (if applicable), entity type, address, and Taxpayer Identification Number. Businesses should review the W-9 to ensure the provided EIN matches their records and legal name. If discrepancies arise, communicate with the vendor to obtain corrected information before issuing payments or filing information returns like Form 1099.

Other methods for verifying an EIN include calling the IRS Business & Specialty Tax Line at 800-829-4933. An assistor can provide the EIN to an authorized person representing the business after verifying identity. For publicly traded companies, EINs are often found in their Securities and Exchange Commission (SEC) filings through the EDGAR system. Some state business directories also allow for verification of active corporations.

Verifying Individual Tax Identification Numbers

Verifying Social Security Numbers (SSNs) has distinct processes, particularly for employers. The Social Security Administration (SSA) offers the SSN Verification Service (SSNVS) as a free online tool for registered employers and certain third-party submitters. This service allows employers to confirm an employee’s name and SSN match SSA records, which is important for accurate wage reporting on Forms W-2.

To use SSNVS, employers must register with the SSA’s Business Services Online (BSO) suite of services. After registration, employers can verify up to 10 names and SSNs online for immediate results. For larger batches, files of up to 250,000 names and SSNs can be uploaded, with results typically available the next government business day. This verification helps ensure proper credit is given to employees’ earnings records for future Social Security benefits and reduces the need for corrected wage reports (Forms W-2c).

For individuals, direct third-party verification of an SSN is generally not feasible due to privacy regulations. Individuals should rely on official documents, such as a Social Security card, or trusted sources when providing or confirming their SSN. Misuse of SSNs is a significant concern, so caution is advised.

Verifying Individual Taxpayer Identification Numbers (ITINs) by a third party is not publicly available in the same direct manner as EINs. The IRS primarily issues ITINs for tax processing, ensuring individuals without an SSN can comply with U.S. tax laws. When an ITIN is provided, such as on a Form W-8BEN, the focus is on ensuring its correct collection and use for tax reporting.

Taxpayers with an ITIN can create an IRS online account to check their own ITIN status, view balance due, payment history, and tax records. The IRS also provides phone numbers (1-800-829-1040 or 1-800-908-9982) for individuals to check ITIN status or for identity verification. For third parties receiving ITINs, the emphasis is on ensuring the number is correctly recorded for tax purposes.