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Attorney Elizabeth Potts Weinstein discusses the process of closing or canceling your EIN with the IRS when shutting down a business. An EIN, or Employer Identification Number, functions similarly to a Social Security number for individuals and serves as a tax identification number for businesses, applicable to sole proprietorships, LLCs, and corporations. As you close your business, it's important to address your EIN to avoid future filings, payments, and taxes on a non-existent entity. Additionally, closing your EIN helps prevent potential fraud that could occur if accounts remain open.