A federal Employer Identification Number (EIN) is a unique nine-digit code assigned by the Internal Revenue Service (IRS) to business entities operating in the United States. This numerical identifier, similar to a Social Security Number for individuals, is essential for businesses with employees, including those utilizing staffing agencies. For example, a temporary staffing agency like Express Employment Professionals would use its EIN for various tax-related processes.
This identifier is crucial for payroll tax reporting, filing business tax returns, and opening bank accounts. It provides a standardized method for the IRS to track business activities and ensure compliance with tax regulations. Historically, the system evolved from earlier employer identification mechanisms to streamline administrative processes and improve tax compliance. Accurate and consistent use of this number is vital for maintaining proper financial records and avoiding penalties.