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Attorney Elizabeth Potts Weinstein discusses the process of closing or canceling an EIN (Employer Identification Number) with the IRS when shutting down a business. An EIN serves as a tax identification number for businesses, similar to how a Social Security number functions for individuals. It can be obtained by various business structures, including sole proprietorships, LLCs, or corporations. Closing the EIN is crucial to prevent future tax filings, payments, or obligations, even after the business has ceased operations. Additionally, terminating the EIN helps mitigate the risk of fraud, as keeping accounts open could allow unauthorized individuals to exploit the situation.
