Yes, you can get an Employer Identification Number even if you owe back taxes. The IRS treats the EIN application as an identification step, not a credit check or a compliance review. The form asks about your entity and its owner; it does not ask whether you owe money. Apply online, for free, and you’ll typically have the number in minutes regardless of your balance with the IRS.
The harder question is what happens next. An EIN gives your business its own tax identity, but it does not build a wall between you and the debt you already owe. Liens, levies, and refund offsets can all reach into a new entity through the person who owns it. Knowing that going in changes how you set the business up.
Getting the EIN When You Owe
You apply using Form SS-4, and the online tool at IRS.gov is the fastest path. It is free, takes about 10 minutes, and issues the number immediately upon approval.1Internal Revenue Service. Get an Employer Identification Number Be wary of third-party sites that charge for this; the IRS never does.
If you cannot use the online tool, faxing Form SS-4 typically produces an EIN within four business days. Mail takes four to five weeks.2Internal Revenue Service. Instructions for Form SS-4 The IRS limits issuance to one EIN per responsible party per day, so if you are setting up more than one entity, space the applications out.3Internal Revenue Service. Understanding Your EIN (Publication 1635)
Nothing in the application process flags unpaid taxes or triggers an extra review because of them. The number comes out the same way it would if your account were clean.
The Responsible Party Link
Every EIN application names a “responsible party,” meaning the individual who ultimately owns or controls the entity and has practical authority over its funds. That person must be a real human with a valid SSN or ITIN; you cannot list another business.4Internal Revenue Service. Instructions for Form SS-4
This matters when you owe. The IRS uses the responsible party’s taxpayer identification number to tie the new entity back to a real person in its records. If that person has a balance due, the connection exists from day one. The EIN still issues. The link is just already there.
If the responsible party ever changes, you report it on Form 8822-B within 60 days.4Internal Revenue Service. Instructions for Form SS-4
How Your Back Taxes Can Reach the New Business
The EIN is not the risk. The collection tools the IRS already has against you are.
Federal Tax Liens
When you owe and do not pay after the IRS demands payment, the government gets a legal claim against everything you own, including your ownership interest in a business, and the lien reaches future assets too.5Office of the Law Revision Counsel. 26 US Code 6321 – Lien for Taxes Once a Notice of Federal Tax Lien is filed in the public record, it shows up in business credit reports, attaches to business property including accounts receivable, and makes credit, leases, and supplier relationships significantly harder to secure.6Internal Revenue Service. Understanding a Federal Tax Lien
Levies
A levy is the IRS actually taking property to satisfy the debt. If you ignore a bill for more than 10 days after written notice and demand, the IRS has authority to seize wages, bank accounts, and other property, generally after sending a written notice at least 30 days in advance.7Office of the Law Revision Counsel. 26 USC 6331 – Levy and Distraint The IRS can levy your personal bank account even if the money came from your business. If your entity is a pass-through (sole proprietorship, partnership, S corporation, or single-member LLC), distributions owed to you can be targeted. In most cases the levy reaches your interest in the business rather than the entity’s assets directly, but for a small operation the practical effect is the same.
Refund Offsets
If your business generates losses or credits that would produce a personal refund, do not plan on receiving the money. The Treasury Offset Program automatically matches your taxpayer ID against outstanding federal debts and reduces or eliminates refunds to cover what you owe.8Bureau of the Fiscal Service. What Is the Treasury Offset Program? No separate IRS action is needed to make this happen.
Don’t Use a New EIN to Dodge the Old Debt
Some people assume that forming a new entity with a fresh EIN walls off their old balance. The IRS has seen this pattern often enough to have specific legal theories for breaking through it. The Internal Revenue Manual addresses taxpayers who transfer property to new entities to avoid collection, and the agency can pursue the new entity under alter ego, successor liability, and nominee theories.9Internal Revenue Service. Fraudulent Transfers and Transferee and Other Third Party Liability
If the IRS concludes your new entity is a shell designed to shield assets, it can file liens and levies directly against the entity’s property. The practical question is whether the business operates as a genuinely separate enterprise with its own income, expenses, and purpose, or whether it is really just you with a different name on the door. Mixing personal and business finances is the fastest way to lose that argument.
Resolving the Debt Before It Resolves You
Starting a business while carrying back taxes is not illegal, but ignoring the debt while building something new is a bet that rarely works out. The IRS offers several formal paths, and using one of them before or shortly after launch sharply reduces the risk that collection action disrupts the business.
Installment Agreement
If you owe $50,000 or less, you can request a streamlined installment agreement with minimal financial documentation using Form 9465. Approved, you pay monthly via direct debit until the balance clears.10Internal Revenue Service. About Form 9465 – Installment Agreement Request Balances above that threshold require a Collection Information Statement with fuller financial disclosure, but installment plans remain available. An active agreement does not erase the debt, but it generally stops aggressive levy action while you pay on time.
Offer in Compromise
An Offer in Compromise settles your debt for less than the full balance. You apply using Form 656, and the IRS weighs your income, expenses, assets, and future earning potential to decide whether the reduced amount is the most it can reasonably expect to collect.11Internal Revenue Service. About Form 656 – Offer in Compromise The IRS will not accept an offer if it believes an installment plan can pay the liability in full. This path fits people whose finances genuinely cannot support full repayment.
Currently Not Collectible Status
If paying anything would leave you unable to cover basic living expenses, the IRS can classify your account as Currently Not Collectible, pausing collection activity. Penalties and interest keep accruing, the IRS can still file a lien, and the agency will re-evaluate your situation periodically.12Internal Revenue Service. Temporarily Delay the Collection Process It is a pause, not a resolution, but for someone in genuine hardship it can create room to get a business running.