Written By Ceridwyn

FAQ: All About EINs

There are many questions that come up repeatedly on www.mysteryshopforum.com that will be compiled in a series of articles here in the Mystery Shopping Magazine. We hope that this will be a convenient resource for you to find the answers you are looking for regarding the tips and techniques and tools used in this business.

All About EINs”

FAQ: What is an EIN? What is it for? An EIN is an Employer Identification Number, also known as a Federal Tax Identification Number. Its purpose is used to identify a business entity. An EIN is similar to the SSN, or Social Security Number, assigned to individuals.

FAQ: How is it used? An EIN is strictly for business activities only, such as opening a bank account or filing taxes. The EIN is used in place of the SSN of the individual.

FAQ: Is getting an EIN mandatory for mystery shoppers? In the majority of cases, applying for an EIN is not required for mystery shoppers.

FAQ: Why would I want to get an EIN if it isn’t necessary? There is concern that the government is attempting to challenge the status of independent contractors. If successful, this could potentially devastate the mystery shopping industry. Therefore, certain organizations and companies are urging mystery shoppers to represent themselves as professionals running independent businesses.

The other advantage of using an EIN is that a mystery shopper can keep their Social Security Number private. Many shoppers have each provided their SSN to dozens and dozens of mystery shopping companies, putting them at potential risk for this information to be misused.

FAQ: How do I sign up for an EIN? The IRS has made this process easy. You can apply online, or by phone, fax, and email. To do so by fax or email, you will need to complete Form SS-4. This can be found on www.irs.gov. This is a free service, regardless of which method you use to apply. The process is quick and uncomplicated.

FAQ: How long does it take to get an EIN? When applying online, you will get your EIN almost immediately. The longest method of application is by mail, which takes a few weeks.

FAQ: I’d like to learn more about this. Where can I get more information? The MSPA, or Mystery Shopper Providers Association, has written an article regarding the use of EINs to establish the legitimacy of independent contractors, which can be reviewed here: http://www.mysteryshop.org/CMS/Resources/shopper%20members%20only/self%20help%20in%20ic%20status.pdf.

The IRS has published an article about understanding EINs, which can be found at this link: http://www.irs.gov/pub/irs-pdf/p1635.pdf. It covers how to apply for an EIN and how to complete Form SS-4.

There are many discussions about the topic of EINs on www.mysteryshopforum.com, both for and against their use. The subject has impassioned contributors on both sides. It’s worth reviewing each viewpoint, as well as the reasons for the differing perspectives.

Each mystery shopper needs to decide for themselves as to whether utilizing EINs is worthwhile to them. Use the resources provided to make an informed decision.

As always, when in doubt, consult a tax professional with your questions or concerns.

Editors note: We are not tax professionals, so please understand that this is not professional advice.

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