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Attorney Elizabeth Potts Weinstein discusses the process of closing or canceling your Employer Identification Number (EIN) with the IRS when shutting down a business. An EIN serves as a tax identification number, similar to a social security number for individuals, and can be obtained by sole proprietorships, LLCs, or corporations. Closing your EIN is crucial to avoid any future tax filings, payments, or liabilities associated with the business that no longer exists. Additionally, canceling the EIN helps prevent potential fraud, as leaving accounts open could allow unauthorized individuals to exploit the inactive business structure.
