Do I Have to Provide My LLC’s EIN to a Customer for Tax Purposes?

Question from JP, Do I Have to Provide My LLC’s EIN to a Customer for Tax Purposes?

Answer from AI:

What the Law Actually Requires

The Internal Revenue Code does not obligate a business to give a customer its Employer Identification Number (EIN), Taxpayer Identification Number (TIN), or the names and addresses of its officers simply because the customer wants to claim a deduction. The IRS only needs proof that you paid for a service; a receipt or invoice that shows the amount, date, and the name of the seller is sufficient for most individual tax returns.

PayPal’s own policies for digital‑goods merchants require only a company name and email address. Because PayPal is the payment processor, the transaction records it holds (downloadable receipts, transaction history, and statements) satisfy the customer’s need for documentation.

Why You May Refuse the Request

• No statutory requirement – Neither the IRS nor any federal privacy law (e.g., the Privacy Act of 1974) compels you to disclose your EIN/TIN or officer information to a customer.
• Risk of identity fraud – An EIN and officer names can be misused for business‑identity theft, fraudulent tax filings, or other scams. Protecting that data is a legitimate business interest.
• Contractual obligations – Your subscription agreement (or terms of service) likely limits the information you must provide to what is necessary for the transaction. If the agreement does not require disclosure of EIN or officer details, you are not contractually bound to share them.

What the Customer Can Use Instead

• PayPal receipts – The customer can log into their PayPal account, select the relevant subscription transaction, and download a receipt that includes the seller’s name, transaction date, and amount. This satisfies IRS documentation requirements for a deductible expense.
• Invoice or statement from your LLC – If you issue monthly invoices (even if they are simple email confirmations), those documents can serve as proof of payment. They need only show your business name, the service provided, and the amount paid.

Practical Steps to Respond

1. Explain the legal position – Politely inform the customer that the IRS does not require the EIN or officer details for their tax filing, and that the receipts available through PayPal (or an invoice you can provide) are sufficient.
2. Offer the necessary documentation – Provide a copy of the monthly invoice or a PDF receipt that includes:
   • Your LLC’s legal name
   • The service description (“monthly digital subscription”)
   • Date of payment
   • Amount paid
3. Maintain data security – State that you are protecting sensitive business information to prevent potential fraud, which is a standard and lawful practice.

When to Seek Professional Advice

• If the customer insists on a Form 1099‑NEC or other tax form that might require your EIN, you may need to issue that form under the usual reporting rules (e.g., if you paid the customer $600+ for services). This is unrelated to the customer’s own deduction claim.
• If you receive a legal subpoena or a formal request from a government agency, you would be required to comply, but a simple customer demand does not trigger that obligation.

Key References

• IRS Publication 535 – Provides guidance on deductible expenses and the documentation needed.
• IRS Form 1099‑NEC Instructions – Explains when a business must furnish its EIN to a payee.
• PayPal Merchant Services Terms – Outlines the minimal information required from sellers of digital services.

In most cases, providing the PayPal receipt or a simple invoice satisfies the customer’s tax‑filing needs without exposing your LLC’s confidential details. If you are ever unsure, a brief consultation with a qualified attorney or tax professional can confirm that your response aligns with both tax law and data‑privacy best practices.