Hello

If you don’t have an EIN, your Social Security number will have to be used for your business taxes.  However, if you filed your 2553 form to have a Subchapter S entity or you filed for a C Corporation filing status, you could have a problem.  You have to file every year.  The IRS has strict, heavy penalties for not filing.  I have had people come to me with $80,000 penalty bills from the IRS because they never filed their taxes after getting an EIN.

Ben Rucker in my office has been very effective at getting the penalties waived and killing EINs that have never filed.

If you have been filing as a sole proprietorship (disregarded entity) or a partnership (1065 form), then don’t worry about the unused EIN.  That means you never filed for Subchapter S or Chapter C IRS status. 

The short story is, unless your EIN has made additional filings to be recognized under Subchapter S or Chapter C, don’t worry about an unused EIN. 

There is a theory that an unused EIN acts as an audit magnet, but going through dormant EINs is not really the way the IRS is currently looking for audit targets.

Note that the decision as to whether or not to use a glamor state for your LLC or corporation hasn’t been addressed here.  Please don’t establish a glamor state LLC or corporation if you haven’t already done one.  98% of the time they are a total waste of money and time, but that is the subject of another email.