The I.R.S. is also very interested in tracking your business and its activities. How do they do it? Let's just say they have your number - your Employer Identification Number.

An Employer Identification Number (or EIN) is a number that is assigned to businesses for the purpose of federal tax identification. If your business is required to obtain an EIN, the process for getting one is fairly painless and straightforward.

In a nutshell, here's what you need to know.

Do I need an EIN?

If you have employees, it only makes sense that you'll need to get an EIN. (Remember: It's called an Employer Identification Number.) You will also need to obtain an EIN if you are organized as a partnership or corporation, file certain tax returns and withholdings, have a Keogh Plan, or are involved with a variety of organizations ranging from estates to nonprofits.

The general rule of thumb is that most small businesses need to get an EIN. If you believe your business may be exempt, contact your accountant or legal advisor to make sure before you choose to ignore the EIN requirement.

Do I need a new EIN?

There are certain circumstances under which you may be required to obtain a new EIN. Although these circumstances are rare, they can arise subsequent to special events in the life of your business.

Circumstances requiring a new EIN include: Bankruptcy, incorporation, the formation of a partnership, or the purchase/inheritance of a business you run as a sole proprietorship. You do not need to obtain a new EIN if you simply change the name of your business, change the location of your business or add new locations, or operate multiple locations.

How do I get an EIN?

To apply for an EIN you need to fill out a Form SS-4 and submit it to the Business & Specialty Tax Department at the IRS. You can submit the form in a number of different ways: By mail, by fax, by phone, even online.

Depending on your business' location, you will need to submit the application to the nearest IRS regional office. To find out which regional office you should submit your application, visit the IRS website at www.irs.ustreas.gov and click the "Businesses" tab.

How long does it take to get an EIN?

You'll need to have your EIN in plenty of time to file your return or to make a tax-related deposit. However, the turnaround time on your EIN depends a lot on the method in which you submit your application. The quickest methods are by phone or online where turnaround is almost immediate. Faxing your application is the next quickest way to get an EIN with a turnaround of approximately 4 business days. The slowest method (surprise, surprise) is by mail. The turnaround time for a mailed EIN application can be up to 4 weeks.

The manner in which you choose to apply for your EIN is up to you. The important thing is that you allow enough time for the IRS to assign you a number so you have one when you need it.