Can't get an FEIN

New client.

Has a MMLLC since 2019.

The IRS FEIN site will not allow an FEIN under the LLC name.

I had the client call the business line, thinking there already must be one, and the IRS said said , "there is no FEIN under that name, please fax or mail in an application".

The problem is - this could take months.

The previous tax preparer filed under 22-2222222.

I'm not sure if I like that idea.

But if we wait on them, I predict late penalties (no FEIN to accept an extension). I suppose I can address the penalties when they come - but this is my advice and suggestion to the client? I don't like that either.

Ideas on how to proceed?

Probably won't work, but can you apply with a slightly different name, then put the original name on the 1065 and check the name change box?

The previous tax preparer filed under 22-2222222.

I'm not sure if I like that idea.

Yeah, I don't like that idea either.

How about this from the 2020 Form 1065 instructions for that line item:

If the partnership has
not received its EIN by the time the return is
due, enter “Applied for” and the application
date in the space for the EIN. For more
details, see the Instructions for Form SS-4.

That said, I'm a bit confused what you mean by this: The IRS FEIN site will not allow an FEIN under the LLC name.

The online tool is telling you that they can't issue an EIN for that LLC name? That might mean an EIN has already been issued for an LLC organized in the jurisdiction you are specifying. So, I would double check the legal name and where the LLC was organized.

Also, the online tool does not allow special characters, even a comma. For example, if the legal name of the LLC is "ABC Investors, LLC" you should enter "ABC Investors LLC" or else you'll get an error.

If you're still getting an error after taking all of the above into consideration, I would just mail in the paper app and do what the instructions suggest. As long as all you need to do is file income tax returns and not run payroll, it shouldn't be that big of a deal.

But if we wait on them, I predict late penalties (no FEIN to accept an extension). I suppose I can address the penalties when they come - but this is my advice and suggestion to the client? I don't like that either.

You'll mail in an extension. The IRS will stamp it and mail it back. You'll attach a copy of that to the tax return. There won't be any penalties as long as you retain the extension, although there will probably be correspondence.

That said, I'm a bit confused what you mean by this: The IRS FEIN site will not allow an FEIN under the LLC name.

I know, right?

The message says that the FEIN cannot be processed, but does not give a reason. I also think that this often means that there already is an FEIN under this name in this state.

There are no curve balls or special characters or anything.

But when the client called the IRS, the agent said that there certainly was not a business on file with the same name, and to fill out a paper application.

The client himself was able to get an FEIN for a different business just after this with no problems.

You are limited to one EIN per responsible party per day... is/was this a factor?

No, thanks(!) but it wasn't that.

Try with a different browser.

Faxing in the SS-4 just takes a few weeks.

IRS has announced, on its EIN online application website, that its online EIN application service will be closed from Dec. 23 at approximately 5 pm Eastern Time until approximately 7 a.m. Eastern Time on Monday, Jan. 4, 2021.

I wonder if the new system just didn't come up yet?

When you are applying are you using "LLC" at the end? I vaguely remember that you should drop the "LLC" when applying, but use it when filing the return.

https://www.mindmybusinessnyc.com/ein-denied-reasons/
https://www.llcuniversity.com/irs/ein-reference-number/
I expect previously filed returns with EIN=all 2's could be the problem.
All speculation.

https://www.mindmybusinessnyc.com/ein-denied-reasons/
https://www.llcuniversity.com/irs/ein-reference-number/
I expect previously filed returns with EIN=all 2's could be the problem.
All speculation.

Wow, interesting links, thanks. I guess we can go through the process again and actually take note of the reference code.

When you are applying are you using "LLC" at the end? I vaguely remember that you should drop the "LLC" when applying, but use it when filing the return.

If it is a general partnership, you cant include "LLC".

If it an LLC, you must include "LLC"

It think.

So I don't think this is the issue

It's not the hours or the site - it was open.

Hoping for the client's sake it only takes a few weeks.

The client insists that their 2020 1065 tax return was e-filed by the previous preparer with 22-2222222 as the FEIN and are asking my why we must mail in their tax return or wait for an FEIN.

They need it for a lender of course, and waiting 18 months for the IRS to process it is not acceptable.

Is it possible that the prior preparer was able to e-file a 1065 with that FEIN? He uses Drake Software.

I wonder if you could just slightly change the name when applying for an EIN, then use the legal name on the 1065 and check the "Name Change" box?

i.e. if the legal name is ABC Co LLC, could you try ABC Com LLC to obtain the EIN?

Then file the 1065 with the name as ABC Co LLC and check the name change box?

I wonder if you'd have efile problems or if it would pass through. I don't know...

I can't believe that the IRS would accept a return with that FEIN. Since the IRS acknowledges receipt of an efiled return I would advise the client to contact the previous preparer for that. Drake has an online portal where you can check the status of efiled returns.

What do you think would be the least damaging to the client and least unethical route for the preparer?

1) File activity as sole prop.

There are no 1099s. Prior preparer only added spouse as partner to scheme on SE taxes (of course I told them I wouldn't do that, explained why, and they agreed). LLC has no bank account.

Then file the partnership with zero activity.

The tax liability is the same. Would the IRS care? Ethics issue?

Is this perhaps an even more correct way to file?

2) Get an FEIN as a general partner and not an LLC. Change it later. This will likely work but it won't have LLC at the end. Bank might not like it. What would the IRS think under examination?

3) Change the business name slightly. Fix FEIN later. Bank might not like it. Ethics/legal issue?

4) Refuse to deviate in the slightest. They had almost 2 years to fix their FEIN when they knew there was an issue. Why should I make it my emergency? File by paper as "applied for" or wait until faxed application results come in the mail.

1 or 4 or tell them to wait for paper filing the request. As you stated, they hsd two years to handle it.