I have no reason to get an EIN. I don't own a business, nor do I work.
However, I don't want to give someone my SSN when I receive a one-time payment from someone for over $600.
I can't trust them to keep my info confidential.
Can I get an EIN anyway, and use the EIN to give to people for tax purposes?
Will the IRS care that I don't run a business (or anything even close to a sole prop or llc) ?
Basically, I want to use my EIN as a proxy to my SSN.
If you receive a payment over $600 as compensation for services performed, that's small business income and you must report it. You can obtain an EIN for that if you prefer, for the reasons you suggest.
You may not use an EIN as a general proxy for your SSN, for example on a W-2G for casino winnings, or a 1098 for a taxable scholarship.
the "E" in EIN stands for Employer (ie a business) if you are not a business you do not qualify to get an EIN.
to be one of the following is required:
Sole proprietor (SSN)
Estate (SSN of decedent)
Plan administrator (TIN)
Trust (TIN of grantor)
Personal service corporation
Church or church-controlled organization
Other nonprofit organization
Indian tribal governments/enterprises
should you get one then you should expect the payors to file 1099's with the IRS. the IRS will then expect the payments to be reported on your tax return. Failure will result in either a notice as to why no reporting or a bill because it will assume it's unreported taxable income.
the IRS says that anyone can get an EIN. I can say that I'm self employed, even though I'm retired.
the question is whether I can use the EIN to report my rebate income.
I just don't want to give any stranger my SSN.
and i'm not trying to evade taxes
I will be using my legal name as my sole proprietor name.
and then using an EIN for Part 1 of the w9
seems like there is no issue with that, since the IRS knows the EIN is linked with my SSN.
it's not for services
it's a rebate payment , for which I have to fill out a W9
the utility company is using a 3rd party rebate processor to pay out rebates.
I don't believe this will be a proper use of an EIN. However, I can't find a regulation or penalty, and you seem to take the view that it is better to ask forgiveness than to ask permission. I'm not sure any more needs to be said.
Separately, you haven't discussed what kind of rebate this will be. If this is a one-time rebate (such as, the utility pays you to install a more efficient furnace) then the money is not taxable, even if they issue a 1099-MISC. Instead, the rebate reduces your cost basis, and reduces the adjustment you can take for capital gains when you sell. There are two ways of dealing with this situation when you file your return.
- Leave the 1099 off your return. File by mail instead of e-filing. Attach a copy of the 1099 and a letter of explanation as to why this is not taxable.
- Add the 1099, then add another item of "other income" with a negative amount to cancel out the income from the 1099. You can e-file, but the IRS may send a letter asking for the reason for the adjustment.
If this is an ongoing payment related to solar energy (RECs, or residential energy credits), the money is taxable "other income." And you don't reduce the cost basis of the solar installation by the amount of the payments.
@Opus 17 wrote:
I don't believe this will be a proper use of an EIN.
I agree, based upon the following language in the instructions for Form SS-4:
An EIN is for use in connection with your business activities only. Don't use your EIN in place of your social security number (SSN) or individual taxpayer identification number (ITIN).