View Full Version : Tax ID

Aaron Hats
11-21-2008, 11:01 AM
I have a customer, a gov't agency, who's asking for our federal tax id so they can set us up as one of their vendors. Is that safe to give out? Obviously, I would never give out my ss# but this is different.



11-21-2008, 12:39 PM
Safe, I don't know, but I've run into it from time to time including large companies like General Electric.

11-21-2008, 05:55 PM
Until your question I had never really thought whether or not your tax id should be given out. I did just find a few sites that will search the FEIN # of any business. They all required logins so I couldn't test if they worked.

I think your tax id is a matter of public record, in which case it's probably fine to give it out. In your case do you trust your customer? Odds are it's fine giving the number out, especially if it's in the public record. If you trust this customer the odds would be even better as far as being safe to give out.

11-21-2008, 07:56 PM
Government agencies usually require having your tax ID on file. It serves several purposes, so there shouldn't be a reason to worry. If you have an EIN for your business, there should be no hesitation in providing this.

If you were provided W9 by this agency, it accomplishes several things:
1. What your legal business name is, to be added to their official vendor list. This can be used to prevent abuse of payment to vendors.
2. It determines your legal entity type. If you're a sole proprietorship or partnership, the government would probably 1099 you for their purchases so it can be reported for tax purposes. They don't issue 1099s for corporations.

If I did business with you (business-to-business), I could very well send you a W9 to legally demand your tax ID so I could 1099 you. You could be fined for not complying with this demand. So your best bet is to comply with this request.

11-22-2008, 09:49 AM
If you want to do business with a company you must give them your federal identification (EIN) so they can properly exclude you from charging you sales tax on your purchase (if appropriate) or to give you a 1099 that they are required to report to the IRS. Other than using the number on your tax reports to the IRS, this is why you have the number. If you don't have a EIN then you are required to use your SS#. Get over the security thing as the bad guys already have your number or can get it anytime they want.

Aaron Hats
11-22-2008, 10:11 AM
Thanks for all the info. The customer originally made their purchase without asking for the number so I'm not exactly sure why they need it now. Sounds like it's no big deal though.


Steve B
11-22-2008, 11:52 AM
I'm surprised you haven't run into this before. It seems like I had to give it out to all my suppliers.

Aaron Hats
11-22-2008, 12:04 PM
Yes, I've had to give it to some suppliers but never a customer. This customer is a state agency so I didn't think it was a big deal but thought I'd ask anyway.

11-22-2008, 12:09 PM
The need of the EIN varies. For your vendors, it is to prevent charging you sales tax. For customers, such as this government agency, it's for their internal controls. They don't just write out checks to anyone.

So no worries :)

11-24-2008, 08:18 PM
I once worked for a company that asked for tax ID numbers from all their vendors. No tax ID number = your bill doesn't get paid.

Giving out a tax ID number is not a problem.