EIN Protection: Preventing Identity Theft in Business Operations

ARTICLE | May 22, 2025

Authored by Schlenner Wenner & Co

The Employer Identification Number (EIN), much like an individual's Social Security Number, is a crucial identifier for businesses. Acting as the financial fingerprint of your company, the EIN is a unique identifier assigned by the IRS and used for various transactions such as tax filings, bank relationships, business deals, and government paperwork. Therefore, it's vital for small businesses to protect this number from misuse, fraud, and identity theft.

Small businesses, often being less fortified than larger corporations, can become prime targets for cyber criminals. A stolen EIN can lead to fraudulent credit lines, fake tax filings, and significant financial disruptions. For instance, unauthorized individuals can file fraudulent tax returns, apply for credit under the business's name, or even set up fake companies. The cleanup process following such incidents can be lengthy and costly, severely disrupting daily operations, and damaging the business's reputation.

The public nature of EINs adds an extra layer of complexity to their protection. Though EINs fall under the public record category, they are not information to be shared casually. Businesses should treat their EIN with the same level of protection as an individual would treat their Social Security Number. This means implementing secure methods for sharing, setting up encrypted storage, and limiting access to the number.

A key part of protecting your EIN involves being vigilant about who is asking for it and why. It is recommended to share it only when legally required or absolutely necessary for business operations. Businesses should set up procedures to verify the identity of the requestor and keep records of each instance the EIN is shared. This builds an audit trail that can help track potential security issues.

Furthermore, businesses should consider implementing digital safeguards, such as password protection, two-factor authentication, and document verification systems. Regular checks of business credit reports are also crucial as they can alert businesses to any suspicious activity linked to the EIN.

The rise of business identity theft makes these precautions essential. The IRS, state tax agencies, and tax professionals are working in coordination to protect taxpayer data, but it is ultimately the responsibility of the business owner to ensure the security of their EIN. So, for the ongoing success and stability of your small business, the protection of your EIN should be a top priority.

If you have any further questions on how to protect a business EIN number, please feel free to give our offices a call.  We're here to help.