EIN Verification

Verifying EINs helps prevent fraud and ensures that the business conducting the check is dealing with a legitimate entity and a compliant business that’s officially registered with the IRS. For businesses dealing with third-party providers, vendors, and multiple partners, EIN verification is part of the KYB process, which helps assess risks and determine if you want to work with that entity. So, if a business doesn’t have a valid EIN, it should be treated with caution. 

Banks, fintech companies, lenders, payment processors, e-commerce sites, or online marketplaces often need EIN verification when onboarding new businesses to comply with KYB compliance requirements and prevent fraud. High-risk industries like these can’t gamble on new partnerships and are required to properly assess potential partners to reduce the risk of fraud. For this reason, various checks and company lookup services are used to save time and stick to regulatory requirements. 

EIN verification is a key part of the KYB, or Know Your Business verification process, which helps confirm the legitimacy of a company, especially in high-risk sectors like banking, fintech, crypto, etc. KYB involves several checks, such as verifying the company’s address and identifying all Ultimate Beneficial Owners (UBOs) to uncover possible red flags like hidden ownership structures. 

By confirming that a company’s EIN is valid, the verifying business ensures the entity is legally registered and operating within regulatory requirements. It’s a common security measure in the US, among other checks, such as assessing whether the business is in good standing. 

A business in the US needs to get an EIN to operate legally. 

This means all businesses that:

• Operate as a corporation or partnership
• Withhold taxes on non-resident alien income
• Have employees
• File certain tax returns
• Have links to other companies, such as estates or trusts

Not always. The IRS does not provide a public EIN lookup tool for private businesses. However, EINs for nonprofits and publicly traded companies can be found through public databases. For proper KYB verification, individuals typically need help from compliance service providers, such as iDenfy, which has EIN verification and streamlines access to various corporate registries and other sources, such as credit bureaus, which offer a great look into an entity’s financial status and overall health. 

Yes. Verifying a business’s EIN helps confirm that the company exists and is properly registered, making it harder for fraudsters to create fake companies. Using an EIN lookup tool like iDenfy can automate these checks and flag suspicious entities during KYB onboarding more efficiently. 

For example, iDenfy’s EIN verification software can be customized to fit your specific onboarding process. You can enable and save this feature on the dashboard, next to settings in the custom KYB workflow configuration section. The company’s EIN verification status will appear in the KYB dashboard as either Not Checked or Verified.