Changing a business name with the IRS can be done in one of two ways. Corporations and LLCs can check the name change box while filing their annual tax return with the Internal Revenue Service (IRS). You can notify the IRS through a name-change letter if the change needs to be quicker or if you’ve never filed an IRS return for the business.
Updating Your Business Name With The IRS
If you need to change your business name, doing so is a straightforward process.
Before filing the name change with the IRS, legal business entities like corporations or LLCs, though not single member LLCs, also called sole proprietorships, because those are a pass through entity, must amend their business formation documents and file them with the state where the business is registered.
Doing this will update the records of the secretary of state or other state agency responsible for regulating corporate affairs. However, once this is done your business name linked to your Employer Identification Number (EIN), which is issued on the Federal level, has not changed in the Internal Revenue Service’s (IRS) records.
To change your business name involves a few more steps, and should only be done once you have changed your business name with your state.
Business Name Change vs DBA
Before filing a name change with your state and the IRS and informing your bank, creditors, and others about the change, you should first make sure that you don’t just need a simple Doing Business As (DBA) filing.
Every registered company has both a legal name and a trade name. The legal name may be something like “Awesome Business LLC,” but that entity then owns a brand called “Red Shoes.” Awesome Business LLC may be confusing to customers, so by filing a DBA the company can sign receipts and invoices as “Awesome Business LLC dba Red Shoes.”
Here is how to decide whether you need a business name change or to simply file a DBA:
- If you are changing your whole business and your old name no longer applies, changing the business name is a clean option.
- If you’ve rebranded your product but the old business name still applies, filing a DBA may make the most sense.
Assuming you’ve decided that changing your business name is the right move, here are the steps to do so with the IRS.
Steps Involved in Changing Your Business Name With The IRS
- Find and research a new name, ensuring it will not infringe on any trademarks.
- Notify your Secretary of State regarding the name change.
- Get the name changed in your licenses and permits.
- Inform the IRS about the name change. In some cases, you may be required to obtain a new EIN.
- Update the new name in your business documents.
- Communicate the name change to your bankers, vendors, customers, and all other concerned parties.
Updating Your Business Name Change With the IRS
If you need to change your company’s name, you must make sure that the IRS, your state, and other concerned parties such as your bank know about it. Usually, changing your business name does not require you to obtain a new Employer Identification Number (EIN). However, you must update the name on your EIN documentation.
There is an easy way to update your business name in the IRS records. C-corporations, S-corporations, and multi-member LLCs that have filed at least one tax return can notify the IRS of the name change by simply checking the name change box while filing your tax return for the current year. You need not mention the old name in the return.
Note that this option is not available to single-member LLCs.
There are other times when you need to change your business name immediately after receiving your EIN. If you need to make a name change before filing a tax return with the IRS, you should send your request to the Cincinnati, Ohio, office of the IRS located at 550 Main St # 10, Cincinnati, OH 45202.
If you are sending a letter You should also submit a copy of the Certificate of Amendment filed with the state where the business was originally formed alongside the name-change letter to the IRS. When properly done, this will update your new name in the IRS records.
Once your new business name is updated with the IRS, you should inform everyone else about your company’s name change.
You may want to prepare a list of your vendors, bankers, creditors, and other agencies that should be notified about the name change.
Contents of the Name Change Letter
The IRS website does not specify what you should include in the name-change letter, but the omission of essential details can result in the IRS rejecting to update its records.
To be safe, you should include the following details in the letter:
- Your current EIN
- The old name of the business as mentioned in the IRS records
- Complete address of the business as it exists in the IRS records
- The new name of your business
- Date from which the name has been changed
- New address if applicable
The owner or an authorized officer of the business as per IRS records must sign the letter. It should be accompanied by a state document approving the name change of your business. The name-change letter should clearly state that your business name has changed. Also, don’t forget to request for a confirmation from the IRS regarding the updating of the new name in its record.
The IRS takes about six weeks on average to process a name change letter. If you fail to provide the necessary details in your letter, the IRS may request additional information, which may further delay the processing.
How To Change An EIN Number
Usually, when simply changing your business’s name, you will not be required to change the EIN as long as the ownership or business structure has not changed as well.
Other changes that often come with a business name change, such as change of ownership, bringing on partners, incorporation, you become a subsidiary of a bigger company, or changing the business classification at all such as from a Corporation to an LLC will require an EIN change.
A full list of times you need to change your EIN along with a business change can be found here on the IRS’s website.
If your business meets the requirements for changing the EIN, you must both apply for a new EIN and cancel the account for the existing one.
EINs are unique to the business for which they were issued, and a canceled number will never be reused for another business.
To apply for a new EIN, go here and follow the steps required.
To cancel an EIN, write to the IRS at “Internal Revenue Service, Cincinnati, Ohio 45999” and give the reason for why you want to close the account. Be sure to include the complete legal name of your business, the EIN, and the business address.
LLC Name Change
A limited liability company (LLC) is a kind of business organization, which blends the flexibility and pass-through taxation benefits of a partnership with the liability protection of a corporation. LLCs are not recognized by the IRS for reasons of federal taxation. Instead, LLCs are categorized as corporations, partnerships, or sole proprietorships. If your LLC effected a name change, reporting the name change to the IRS only takes a statement on your LLC’s annual tax return.
Corporation Name Change
If your organization changed its name because it was converted from a corporation to a limited liability company, it needs a new EIN. To request a new EIN, send an application through the IRS’s online EIN assistant. As a corporation, you can file an annual Form 1120 by checking “Name Change” on page 1, line E.
Form 1120 is for the U.S. Corporation Income Tax Return, which requires companies to annually file their debts and income. When supplying the organization’s new name under section A of the form, including the old name of the company won’t be necessary because an officer of the company must sign the form.
S Corporation Name Change
An S corporation can file Form 1120S by checking “Name Change” on page 1, and adding its company’s new name under section A. Again, it won’t be necessary to include the company’s old name because an officer of the company must sign the form.
Partnership Name Change
A partnership can file Form 1065 by checking “Name Change” on page 1, line G. It also needs to add only the new name of the company as an officer of the company must sign the form.
Sole Proprietorship Name Change
A sole proprietorship can file by writing to notify the IRS of its company’s name change, and mail the document to the IRS address where it files its annual tax return. That’s because the IRS doesn’t have a formal notification form for sole proprietorships filing for a change of name. However, an officer of the company must sign the document of notification (the letter) before sending it to the IRS.
LLC’s Certificate of Amendment
Even if you’ve already filed a tax return for the present year, you can still file for your company’s change of name without waiting for next year. To change the name of your LLC, you need to file a certificate of amendment with the original home state or country of your company. When filing for a change of company name with the IRS, you have to send a copy of the certificate of amendment with a letter to the IRS address where you filed your annual return, to inform the IRS of the name change.
You Need to Inform Others
The moment you’ve changed your company’s name with the IRS, you’ll have to inform everyone else about your company’s name change as well. It’s not a bad idea to compile a list of all other agencies and organizations your company regularly transacts with. Some of them are as follows:
- Every state and local tax agency
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