Home Page link  

Use EIN to legitimately hide SSN from clients?

  
Groups | Search | About
User Password
Register Now! Lost Password?

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated)

 Post an article  get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
Use EIN to legitimately hide SSN from clients? Rich Carreiro 06-27-2007
Posted by Rich Carreiro on June 27, 2007, 10:54 pm
Please log in for more thread options
 A relative (a published author) is going to be doing some
consulting. She does plan to talk to a lawyer and a tax pro
about what form of business to ultimately use (consulting
workshops she's gone to recommend creating either a S-Corp
or a LLC because many companies, especially bigger ones, can
be very reluctant to contract with an individual). However,
for the near-term, she'll be a sole proprietor in her
consulting work.

Because of the book, she actually already is a sole
proprietor. She has previously opened a solo 401(k). As part
of opening that, she had to apply for an EIN because an EIN
is explicitly needed for the "plan administrator" part of
the solo 401(k) paperwork.

Now, she's not thrilled about having to give out her SSN
when she does her consulting gigs. Can she legitimately
instead give out the EIN she already has? (And then would
she put that EIN on her consulting Sched C?) If not, can she
apply for another EIN (reason being "starting new business")
and legitimately give that out to clients (and use it on the
consulting Sched C)?

Or is the only way to get out of giving out her SSN is to
form a corp or LLC and have the entity contract with the
client, giving the entity's EIN to the client?

--
Rich Carreiro rlcarr@animato.arlington.ma.us

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Stuart Bronstein on June 29, 2007, 6:08 pm
Please log in for more thread options
> Because of the book, she actually already is a sole
> proprietor. She has previously opened a solo 401(k). As part
> of opening that, she had to apply for an EIN because an EIN
> is explicitly needed for the "plan administrator" part of
> the solo 401(k) paperwork.
>
> Now, she's not thrilled about having to give out her SSN
> when she does her consulting gigs. Can she legitimately
> instead give out the EIN she already has? (And then would
> she put that EIN on her consulting Sched C?) If not, can she
> apply for another EIN (reason being "starting new business")
> and legitimately give that out to clients (and use it on the
> consulting Sched C)?

A sole proprietor is allowed to have an EIN and use it for
the business. So I don't see why that would be a problem in
her case.

Stu

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by John L on June 29, 2007, 6:08 pm
Please log in for more thread options
> Now, she's not thrilled about having to give out her SSN
> when she does her consulting gigs. Can she legitimately
> instead give out the EIN she already has? (And then would
> she put that EIN on her consulting Sched C?)

I've been doing that for a decade, giving people a W-9 with
my EIN, then reporting the income on Sched C with that EIN.
Works fine for me.

> If not, can she apply for another EIN (reason being "starting new
> business") and legitimately give that out to clients (and use it on
> the consulting Sched C)?

The IRS says that if you're a sole proprietor you use the
same EIN for all your businesses.

R's,
John

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Paul Thomas, CPA on June 29, 2007, 6:08 pm
Please log in for more thread options
> A relative (a published author) is going to be doing some
> consulting. She does plan to talk to a lawyer and a tax pro
> about what form of business to ultimately use (consulting
> workshops she's gone to recommend creating either a S-Corp
> or a LLC because many companies, especially bigger ones, can
> be very reluctant to contract with an individual). However,
> for the near-term, she'll be a sole proprietor in her
> consulting work.
>
> Because of the book, she actually already is a sole
> proprietor. She has previously opened a solo 401(k). As part
> of opening that, she had to apply for an EIN because an EIN
> is explicitly needed for the "plan administrator" part of
> the solo 401(k) paperwork.
>
> Now, she's not thrilled about having to give out her SSN
> when she does her consulting gigs. Can she legitimately
> instead give out the EIN she already has? (And then would
> she put that EIN on her consulting Sched C?) If not, can she
> apply for another EIN (reason being "starting new business")
> and legitimately give that out to clients (and use it on the
> consulting Sched C)?
>
> Or is the only way to get out of giving out her SSN is to
> form a corp or LLC and have the entity contract with the
> client, giving the entity's EIN to the client?

I might not fully understand what happened, but the EIN is
for her "business" or for the Solo 401K plan?

If for her business, then she can utilize that EIN as you
are suggesting.

If the EIN identifies the plan, then it can't be used by her
business for business earnings.

--
Paul A. Thomas, CPA
Athens, Georgia

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Rich Carreiro on July 1, 2007, 6:06 pm
Please log in for more thread options

> I might not fully understand what happened, but the EIN is
> for her "business" or for the Solo 401K plan?

To open a solo 401(k), (at least with Fidelity), the
custodian requires that the "employer" have an EIN,
even for sole proprietors. So she got an EIN. The
"type of entity" given on line 8a was "sole proprietor"
and the reason given on line 9 "created a pension plan".

> If for her business, then she can utilize that EIN as you
> are suggesting.

On the paperwork to open the solo 401(k), the EIN was
used in the "Employer information" block.

--
Rich Carreiro rlcarr@animato.arlington.ma.us

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>

Similar ThreadsPosted
Organizers For New Clients April 23, 2006, 1:43 am
signed copies of returns provided to clients December 12, 2006, 2:35 am

Contact Us | Privacy Policy
This site is not affiliated with Intuit - makers of Quickbooks and Quicken software
This site is not affiliated with Sage Software - makers of Peachtree accounting software
XML SitemapXML Sitemap