EIN vs SSN Identity Theft

I've been doing a lot of reading about using an EIN as a sole proprietor instead of your SSN to reduce your risk of identity theft for MS. I haven't found the answer to this question: Can identity thieves take out loans with your EIN? If so, how would using an EIN instead of an SSN be beneficial? Thank you for your answers

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An EIN is not a SSN. You might be able to use an EIN to get a business loan, but the amount of documentation required for a business loan would be huge. I doubt anyone would even try. And unless the EIN has its own credit history, banks require your own SSN anyway.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

That's a good point. I guess the only thing to worry about with an EIN would be income tax fraud. I'll talk to my CPA about getting one specifically for mystery shopping since the general consensus appears to be that it is a better idea than giving every mystery shop your SSN.

Before you get too involved, make a discrete call to your local government. In my area an EIN for anything other than an Estate is viewed as a 'business' and thus eligible for business licensing. Here that includes a mandatory Sales Tax number with at least quarterly reports to submit to the State (even though they are $0), an annual business inspection on premises, including appropriate and up to date fire extinguishers etc. in order to get a business license. It means annual intangible taxes on business equipment. The bureaucracy here (and unnecessary expense in licenses etc.) would make having an EIN a PITA. Further a 'business' is not allowed in many residential neighborhoods--one more hoop to jump through.

Flash makes a valid point, but I think (hope) that the situation he describes is unusual. None of those are triggered in NJ, PA, or DE, although I suppose that individual local governments might have discovered these additional sources of revenue.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

Thank you for the warning. I live in CA and will be sure to find out about that because I don't want any more obligations.

Also, I don't plan on doing more than 1 - 2 shops per week. So far the shops I've done were spread out among different Mystery Shops. Do you think at this rate I'll simply be able to bypass giving these companies my SSN/TIN? Or, do most companies require you to give them your SSN/TIN in order to get paid, even below $600 a year?

I'm currently signed up with 6 MS and have only given my SSN to Market Force. Although, one other company I have a shop lined up to do in a couple weeks requires SSN/TIN Verification before I can get paid.

SSN verification is not just for taxes. The MSCs seem to be using it as verification you are eligible to work in the U.S. I honestly don't know their obligation or liability when it comes to independent contractors. It could just be their lawyers saying it will cover their butts. There have also been a few companies here and there where I had to provide more documentation.

Equal rights for others does not mean fewer rights for you. It's not pie.
"I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag." -Molly Ivins
Never try to teach a pig to sing. It's a waste of your time and it really annoys the pig.

My understanding is that the IRS requires that the MSC verify that everyone that they contract with is eligible to work in the US. The MSC is reporting (not dollar by dollar by in the aggregate) all fees paid to contractors since it is a business expense for them, and therefore their records are subject to audit. Should they get audited, they could be asked for the SSN or EIN of any contractor at random. They rules have tightened a lot in the last decade. Some MSCs used to wait until you got near $600 to request your SSN / EIN, but because some started to run into problems with shoppers who didn't want to provide an SSN and in some cases just ignored the requests (I have been told this by several different MSCs.) they now require them in advance, and they verify them with the SS Administration.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

I spoke with my CPA and he said I could get an EIN and even a fictitious name for mystery shopping. He is unfamiliar with mystery shopping, but understands I'll be working as an independent contractor with a sole proprietorship.

Also, If I open a business credit card with the EIN will they have access to what type of business the EIN is being used for?

You may want to speak with someone who is familiar with mystery shopping. I'm honestly not sure how the fictitious name would work with the MSCs depending on what name you are using. They may not want to contract with Tom's Mystery Shopping Company.

@Bubbabubba wrote:

I ONLY use EIN when possible...
BTW NEVER give your ACTUAL birth date.They dont need it.
With a fictitious B/D, ID theft is more difficult. Suggestion is.... use April 1st or Dec 25 etc, its easy to remember.

And that, dear friends, has to rank fairly high on the list of bad and wrong headed advice. Thank you so much Bubbabubba for attempting to sabotage shoppers.

I've spoken with two CPAs this past week and neither knew anything about mystery shopping. They didn't mention anything about additional local fees for simply having an EIN and gave me the green light to get one.
I'm going to do a few more forum searches about the topic and if I don't see anything that worries me I'll probably go ahead and sign up for one this weekend.

May I ask how long the application process on the IRS website takes to complete?

Are your CPAs versed in independent contractor work? We find people often feel the information they got was the best because the person's name had those letters behind it. In reality, if they are not familiar with independent contracting and home-based businesses, the information is not always accurate. I checked with my local municipality to see if any licenses, etc., were required for my business. They were not familiar with the whole concept of mystery shopping, but knew the general questions to ask for any home-based business and we were able to determine I didn't need the license.

Which has absolutely nothing to do with my post.

Yes, the CPA I met with actually specializes in home-based businesses.

However, I will heed your advice. I should call my local city government to find out if there will be any obligations I'll need to fulfill if I obtain an EIN, correct? Anything else I should do?

@Bubbabubba wrote:

4 minutes

Thank you, I appreciate the info. Although, I'll probably listen to Lisa's advice and call my city just to make sure. Better safe than sorry, right?

I think so, but it is obvious Bubba thinks any attempt to operate as a legitimate business and within the law is unnecessary.

Applying for an EIN is easy. I ran my own (physical) business for several years and had to get one. Once you've been given a number, it will work for any enterprise you do in the future.

Happiness is not a goal; it is a by-product. Eleanor Roosevelt

Now you have me mixed up with Flash. I just questioned your irrelevant post about Uber drivers. Maybe you need a nap?

@KathyG wrote:

Applying for an EIN is easy. I ran my own (physical) business for several years and had to get one. Once you've been given a number, it will work for any enterprise you do in the future.

I actually am in the process of setting up a LLC with its own EIN for a different business venture of mine. My CPA said I could use the same EIN for mystery shopping, but I thought I would just get a separate EIN for mystery shopping as long as it doesn't increase my obligations in any way. Just to keep the two businesses legally separate. You don't think I'm not being overly cautious about it am I?

@Bubbabubba, why are you bringing me into a thread that I had nothing to do with? I guess it is T Time once again.

I've been reading up on the state, county, and municipality rules on EIN, but it's kind of confusing. I'll try finding a number to call tomorrow.

Make sure you do more than just get an EIN if you go with LLC. The IRS considers a single member LLC to be a disregarded entity, which results in your W9 having your social security number on it anyway. You must actually elect to be treated like a corporation to avoid that.

[www.irs.gov]

@ninja4332 wrote:

Make sure you do more than just get an EIN if you go with LLC. The IRS considers a single member LLC to be a disregarded entity, which results in your W9 having your social security number on it anyway. You must actually elect to be treated like a corporation to avoid that.

[www.irs.gov]

Yes, I'll be sure to have my LLC for my separate business(not mystery shopping) set up correctly with all the requirements fulfilled.

With regards to the EIN for mystery shopping. If I get one, and then discover there are licenses and taxes that I need in order to use it, can I simply stop using it, pay anything I owe, and just do not use it again in the future?

I'm sure you could but I think it would be better to contact your city and your Accountant and figure that out before even going down that path. It will save you a lot of hassle in the long run.

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EIN vs SSN Identity Theft

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