Taxpayer Identification Number - TIN

DEFINITION of 'Taxpayer Identification Number - TIN'

A taxpayer identification number is a number that is assigned to a tax-paying businesses and other entities for identification, reporting and record keeping purposes. The TIN helps the IRS keep track of these entities and manage their tax accounts. Corporations, partnerships, estates and trusts, as well as some proprietors and other individuals, must use these numbers when filing tax returns and other tax-related documents.

For sole proprietors, the TIN is their Social Security number or an employer identification number (EIN). For corporations, partnerships, trusts and estates, this number is an EIN.

BREAKING DOWN 'Taxpayer Identification Number - TIN'

Types of TINs include Social Security numbers, employer identification numbers, individual taxpayer identification numbers, adoption taxpayer identification numbers and preparer tax identification numbers. The Social Security Administration issues Social Security numbers to U.S. citizens, as well as qualified lawful aliens. The IRS issues all other types of taxpayer identification numbers.

Required Uses of TINs

The IRS requires the use of taxpayer identification numbers on many tax-related documents, such as tax returns, statements and reports. For example, taxpayers filing annual tax returns must furnish a TIN on their return, and employers reporting wages paid to employees must furnish these employees' TINs.

Employer Identification Number

Employer identification numbers (EINs) are also known as federal employer identification numbers. The IRS requires businesses, including corporations and partnerships, as well as some trusts and estates, to use EINs. Sole proprietors may use an EIN or their Social Security number. A sole proprietor who employs at least one individual, other than herself, must obtain an EIN. In addition, the IRS requires entities to use an EIN under special circumstances, such as if they have a Keogh plan, file returns related to alcohol, tobacco or firearms, or if they are involved with certain types or organizations.

Obtaining an EIN is free and can be done online. The IRS advises that responsible parties ensure a business is legally formed before obtaining an EIN. Typically, a new EIN must be obtained if the business ownership or structure changes.

Individual Taxpayer Identification Number

Certain resident and nonresident aliens who are unable to obtain Social Security numbers may file form W-7 with the IRS to obtain an individual taxpayer identification number (ITIN). These are nine-digit numbers that are formatted like Social Security numbers. The IRS authorizes acceptance agents, such a colleges, financial institutions and accounting firms, to assist applicants in obtaining ITINs.

Adoption Taxpayer Identification Number

The IRS sometimes issues an adoption taxpayer identification number (ATIN) to a child who is being adopted in the United States if the child cannot obtain a Social Security number before the adopting individuals must file a tax return. These numbers are temporary.

Preparer Individual Taxpayer Identification Number

The IRS requires paid tax preparers to include their preparer individual taxpayer identification number (PTIN) on tax returns or claims for refunds that they prepare substantially or in full. Tax preparers may apply for these numbers by mail or online. Special rules apply to foreign tax preparers who are unable to obtain Social Security numbers.