QUESTION

If foreigner is applying for EIN for C-Corp without SSN, will it make the C-Corp unable to do business/hire in the US?

Asked on Jan 07th, 2014 on Taxation - Michigan
More details to this question:
I am currently in the US on a B2 visa to start a C-Corp. As a foreigner, I don't have a SSN or an ITIN. I need to apply for an EIN for the company. The IRS website says that, without a SSN/ITIN, I cannot use the online form to obtain the EIN, and I have to call the IRS directly and fax in the SS-4 to get the EIN. Here is the problem: my incorporation agent (a pretty large and well-known one) has told me that since I don't have a SSN or an ITIN, the EIN I obtain from the IRS will make my c-corp a "foreign entity" which will disqualified it from doing business or hiring in the US. Is that true? Is there some boxes in the SS-4 form that may make that difference (so that I must avoid)? Because I am planning to hire a few employees in the US in the future, please advise me what I should tell the IRS on the phone and where on the SS-4 form I should pay specific attention to, so that I can avoid this issue of "EIN obtained by a foreigner will make the c-corp a foreign entity not able to do business in the US".
Report Abuse

1 ANSWER

Refer to the IRS website. See information pasted below. IN summary, you must obtain a ITIN (Form W-7) if you cannot obtain a social security number. You can hire employees. Taxpayer Identification Numbers (TIN) A Taxpayer Identification Number (TIN) is an identification number used by the Internal Revenue Service (IRS) in the administration of tax laws. It is issued either by the Social Security Administration (SSA) or by the IRS. A Social Security number (SSN) is issued by the SSA whereas all other TINs are issued by the IRS. Taxpayer Identification Numbers ?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"ATIN" ?Preparer Taxpayer Identification Number "PTIN" Note: The temporary IRS Numbers previously assigned are no longer valid. Do I Need One? A TIN must be furnished on returns, statements, and other tax related documents. For example a number must be furnished: When filing your tax returns - A change in IRC section 6109 regulations in 1996 mandates the use of a TIN on tax returns. When claiming treaty benefits - There was a change in the IRC section 1441 regulations in 2001 which mandates the use of a TIN in order to claim tax treaty benefits. A TIN must be on a withholding certificate if the beneficial owner is claiming any of the following: ?Tax treaty benefits (other than for income from marketable securities) ?Exemption for effectively connected income ?Exemption for certain annuities When Claiming Exemptions for Dependent or Spouse: You generally must list on your individual income tax return the social security number (SSN) of any person for whom you claim an exemption. If your dependent or spouse does not have and is not eligible to get an SSN, you must list the ITIN instead of an SSN. You do not need an SSN or ITIN for a child who was born and died in the same tax year. Instead of an SSN or ITIN, attach a copy of the child's birth certificate and write Died on the appropriate exemption line of your tax return. How Do I Get A TIN? SSN You will need to complete Form SS-5, Application for a Social Security Card (PDF). You also must submit evidence of your identity, age, and U.S. citizenship or lawful alien status. For more information please see the Social Security web site. Form SS-5 is also available by calling 1-800-772-1213 or visiting your local Social Security office. These services are free. EIN An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. It is also used by estates and trusts which have income which is required to be reported on Form 1041, U.S. Income Tax Return for Estates and Trusts (PDF). Refer to Employer ID Numbers for more information. The following form is available only to employers located in Puerto Rico, Solicitud de N?mero de Identificaci?n Patronal (EIN) SS-4PR (PDF). ITIN An ITIN, or Individual Taxpayer Identification Number, is a tax processing number only available for certain nonresident and resident aliens, their spouses, and dependents who cannot get a Social Security Number (SSN). It is a 9-digit number, beginning with the number "9", formatted like an SSN (NNN-NN-NNNN). To obtain an ITIN, you must complete IRS Form W-7, IRS Application for Individual Taxpayer Identification Number (PDF) . The Form W-7 requires documentation substantiating foreign/alien status and true identity for each individual. You may either mail the documentation, along with the Form W-7, to the address shown in the Form W-7 Instructions, present it at IRS walk-in offices, or process your application through an Acceptance Agent authorized by the IRS. Form W-7(SP), Solicitud de N?mero de Identificaci?n Personal del Contribuyente del Servicio de Impuestos Internos (PDF) is available for use by Spanish speakers. Acceptance Agents are entities (colleges, financial instituti
Answered on Jan 10th, 2014 at 5:22 AM

Report Abuse

Ask a Lawyer

Consumers can use this platform to pose legal questions to real lawyers and receive free insights.

Participating legal professionals get the opportunity to speak directly with people who may need their services, as well as enhance their standing in the Lawyers.com community.

0 out of 150 characters