Vendor name change, merger or new EIN: why the TIN match fails and when to retry

What the match actually compares

TIN Matching does not read the vendor's articles, its state certificate or its W-9. It compares the EIN you submit against the Business Master File and checks the first four characters you sent against the name control stored on that account. The account holds one primary name at a time. Whatever the vendor has renamed itself on paper, the IRS matches against the name in that record until an Entity employee changes it (IRM 3.13.2.10.24).

That is the whole explanation for most "but our name is correct" calls. The name is correct at the state. It is not yet correct at the IRS, or the EIN is not yet there at all.

Which event, which fix

A brand-new EIN

The IRM says it plainly, in a passage written for SAM.gov registrants but true of every process that reads the Master File: "To pass a name/TIN match, the EIN must be posted to Master File. Therefore, a taxpayer who ... applied for an EIN via the online EIN application, Modernized Internet EIN, or fax must wait until the EIN posts to Master File, or the name/TIN match will fail" (IRM 3.13.2.2.12). TIN Matching reads the same file.

The IRM's own turnaround target for a paper Form SS-4 is seven days, against thirty for general entity correspondence and Form 8822-B (IRM 3.13.2). A vendor that applied by fax or mail may therefore be two or three weekly cycles away from matchable. Nothing you or the vendor can do accelerates the posting; calling the Business and Specialty Tax Line to "activate" the number is not a thing.

A name change on the same EIN

A corporation or LLC that changes its legal name keeps its EIN. The IRS learns about it from the name-change box on the entity's next return, or from a letter signed by an officer. What happens next is in IRM 3.13.2.10.24. Corporate and LLC name changes "can be verified through the respective Secretary of State offices via the Internet," and Entity checks. Partnership name changes "cannot be verified through any outlet available to IRS employees," so the IRS relies on the taxpayer's statement. A sole proprietor's personal name change is checked against the SSN first; if the Social Security record has not changed, the IRS asks for the marriage certificate or court order. A trust name cannot be changed on correspondence without a copy of the trust instrument, because the IRS needs to know whether a new trust, and so a new EIN, was created.

Once verified, the change is input, and "A Letter 147C will be sent on every valid name change input." That letter is the proof you want: it shows the name exactly as the IRS now holds it, dated after the change. Until it exists, the old name still matches and the new one does not. If the vendor's new W-9 fails and the old name passes, the IRS has not processed the change yet.

Expect the correspondence path to take about a month; the IRM's turnaround target for entity correspondence is thirty days, and a return-driven change waits for the return to be processed. A name change reported on a return filed in March may not be on the account until well after the spring TIN Matching runs.

Mergers and reorganizations

When two companies merge, "the surviving corporation" keeps its own EIN and the merged corporation is told to file its final return; the IRM instructs staff, in capitals, "DO NOT INPUT TC 011" (IRM 3.13.2.10.11), the transaction that would fold one EIN into another. The absorbed company's EIN is not transferred to the survivor. Two consequences for a payer: payments made after the merger belong on the survivor's name and EIN, and a 1099 filed under the old company's name and EIN for post-merger payments is a reportable-payee error even though the pair still matches.

A consolidation that creates a new corporation, a sole proprietor who incorporates or takes on partners, and a partnership that incorporates all get a new EIN and are, to your vendor file, new vendors. A corporation that only changes its name, its address, its state of incorporation in a reorganization that changes "only identity, form, or place," or that elects S status, keeps its EIN. The IRS list is on irs.gov under "Do you need a new EIN"; the Entity manual applies the same tests when it decides whether to change a name or assign a number.

Entity traps that look like changes

• Single-member LLC on the owner's EIN. When a disregarded LLC uses its owner's EIN, the IRS record's primary name is the owner and the LLC name sits on the sort line (IRM 3.13.2.26). The LLC name fails; the owner's name matches. That is not a change at the vendor; it has always been that way.
• Reversed name lines. If an entity's first and second name lines were reversed at setup, the IRS corrects them on request and issues a 147C (IRM 3.13.2.10.14). Until someone asks, the name control is built from the wrong line.
• Trade names. A DBA is never part of the name control. A vendor that "changed its name" from one trade name to another has changed nothing the IRS matches.
• An EIN that fell off the file. Before 2008 an EIN that filed nothing for three years was removed from the Master File. The IRS can re-establish it when the taxpayer asks (IRM 3.13.2.10.14), but until then the number is valid-looking and unmatchable. This is what a long-dormant vendor's code 3 often is.
• Two EINs. A vendor that obtained a second EIN by mistake will match on one and not the other, and each may carry a different name control.

What to ask the vendor for

1. A Letter 147C dated after the change. It is the only document that shows the name as the IRS holds it. The original CP 575 "cannot be duplicated" (IRM 3.13.2.10.13), so a vendor that offers its EIN confirmation letter is offering the name as of the day the EIN was issued, which is the problem. The 147C page covers how the vendor gets one, same day by fax for backup-withholding cases.
2. A new W-9 with the legal name on line 1 exactly as it appears on the 147C, and the trade name, if any, on line 2. For a single-member LLC on the owner's number, line 1 is the owner.
3. The date of the event. Payments before and after a merger or incorporation may belong to different payees on different 1099s.

The state certificate of amendment proves the change happened at the state. It proves nothing about the IRS record, which is why the Entity manual has staff look it up themselves rather than accept a copy.

What name goes on the 1099

The penalty for an incorrect name/TIN combination is measured against IRS records at the time the return is processed, not against the vendor's paperwork. If the IRS has not yet processed the name change when you file, the new name on the 1099 comes back on a CP2100 and the old name does not. The safest filing name is the one that matched last. Keep the new W-9 on file with the date it arrived and a note of the match result under each name; that record is the reasonable-cause statement if the combination is later penalized, because you acted on a W-9 and on the IRS's own response. The name control calculator shows which four characters each version of the name produces, which is often the whole difference.

Questions people ask