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Attorney Elizabeth Potts Weinstein discusses the process of closing or canceling an Employer Identification Number (EIN) with the IRS when shutting down a business. An EIN, often referred to as a tax identification number, functions similarly to a social security number for individuals and is necessary for various business structures, including sole proprietorships, LLCs, and corporations. It’s important to officially close the EIN to avoid future tax filings, payments, or obligations that may arise after the business ceases operations. Additionally, closing the EIN helps prevent potential fraud that could occur if accounts remain open.
