Taxpayer Identification Number (TIN)

A Taxpayer Identification Number (TIN) is a unique identification number used by the Internal Revenue Service (IRS) in the administration of tax laws. While there are various types of TINs, all businesses will have some form of TIN, which will act as a unique identifier of a business entity.

The list of TIN types are the following:

  • Social Security Number (SSN)
  • Employer Identification Number (EIN)
  • Individual Taxpayer Identification Number (ITIN)
  • Taxpayer Identification Number for Pending U.S. Adoptions (ATIN)
  • Preparer Taxpayer Identification Number (PTIN)

Today, Middesk focuses on entities that have EINs, also known as a Federal Tax Identification Numbers (FEIN), which are assigned to business entities, as well as estates and trusts.

All valid business entities will have an EIN issued by the IRS. The Federal government requires a legal entity have an EIN in order to pay employees and to file business tax returns. To be considered a Partnership, LLC, Corporation, S Corporation, Non-profit, etc., a business must obtain an EIN when incorporating.

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EIN vs SSN

Businesses that are registered as sole proprietorships use the Owner / Operator's SSN in the place of the EIN.

Middesk today does not support verifying SSNs.

EINs do not expire. Once an EIN has been issued to an entity, it will not be reissued. As such, each EIN is unique to a business and persists over time.

How Middesk helps verify EINs

Verifying the EIN of a business is a crucial part of business verification. When creating a Business through Middesk with a TIN, Middesk will verify that the EIN is valid and that it matches the name passed to Middesk. If the EIN is unable to be verified or does not match the name provided, Middesk will perform a series of lookups to identify alternate names that may be associated with that EIN.

Verifying a TIN and Business Name match is important for a couple of reasons:

  • All state and legal filings associated with a Business are typically traced through the Business's legal name. Without the correct entity legal name, Middesk is unable to conduct accurate screenings of that business for reports like Registration Records, which may subsequently delay onboarding.
  • If onboarding clients that will process over $20,000 and 200 payments in a calendar year, you must file a form 1099-K with the IRS. The 1099-K requires a merchant’s Tax ID, legal name, address, and total number of transactions for the calendar year. If the company files inaccurate, incomplete, or tardy returns, it may be fined hundreds of dollars per erroneous filing, with no maximum penalty.

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TIN Formating

All TINs should be passed as a 9-digit number with no formatting. For example, Middesk's TIN of 37-1883180 should be passed as 371883180.

When a TIN is passed for verification, Middesk can return any of the following responses

status

label

sub_label

Success

The IRS has a record for the submitted TIN and Business Name combination

Found

Failure

We believe the submitted TIN is associated with a different Business Name

Mismatch

Failure

The IRS does not have a record for the submitted TIN and Business Name combination

Not Found

Failure

TIN/name failure - Duplicate request

Duplicate

Failure

TIN/name failure - IRS is unavailable

Unavailable

In the case of an error

If there is a Duplicate request or IRS unavailable error, the TIN will be retried and should be available up to several hours after the initial request. IRS unavailable errors will be retried as soon as the IRS becomes available again, which can range anywhere from several minutes to several hours. For Duplicate Request errors, they will be retried several hours after the initial request was made. If the request fails during the retry attempt, the TIN will be rescheduled and retried until the request is successful. Upon a successful retry, a tin.retried webhook will be emitted.

For more details about TINs, see our reference or reach out to [email protected]


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