When you dissolve your LLC with the state, the IRS is not told. The state and the IRS do not share this information. Your LLC's EIN stays linked to an open business account at the IRS, and the IRS can keep expecting tax returns from it. To end that, the LLC has to ask the IRS to close the account. This guide explains what that means, what the letter must contain, who signs it, and what can stop it.
The IRS never cancels an EIN
Many owners ask how to "cancel" their EIN. Strictly speaking, you cannot. The IRS never cancels or reuses an EIN. Once a number is assigned to your LLC, it belongs to that LLC for good, even after the LLC no longer exists.
What the IRS does instead is close the business account linked to the EIN. After the account is closed, the IRS no longer expects returns from the LLC. If you ever need the number again, for example to answer an old question from a bank, it still identifies the same LLC.
So when you read "close the EIN", "cancel the EIN" or "deactivate the EIN", they all mean the same thing in practice: asking the IRS to close the business account.
Why the state dissolution is not enough
Dissolving the LLC with the Secretary of State ends the LLC under state law. It does nothing at the federal level. The IRS keeps its own records, and as long as the account is open, it may expect returns every year. If none arrive, it can send notices to the address it has on file.
For a foreign-owned single-member LLC this matters even more. Form 5472 is due every year the LLC exists, including the final year, and the penalty for a missed form is $25,000 per form, per year. See our guide on Form 5472 in the final year.
What the letter to the IRS must contain
There is no special IRS form for this. The LLC sends a letter. It should include:
- The complete legal name of the LLC, exactly as the IRS has it.
- The EIN.
- The business address the IRS has on file.
- The reason for closing the account, for example that the LLC has been dissolved.
- A signature from an owner or another authorized person.
If you still have it, include a copy of the EIN assignment notice, called the CP 575. This is the letter the IRS sent when the EIN was first issued. It is not required, but it helps the IRS match the letter to the right account. If you lost it, the letter can still be sent without it.
Use the exact legal name and address the IRS has. Small differences, such as a missing "LLC" or an old address, can slow things down.
Who signs the letter
The letter is signed by an owner (a member) of the LLC or by another person authorized to act for it. For a single-member LLC, that is usually you. For a multi-member LLC, one member who is authorized under the operating agreement can sign. Write the signer's name and title clearly, for example "Jane Doe, Member".
Outstanding returns block the closure
This is the point most owners miss. The IRS will not close the account until all required returns are filed and all taxes are paid. That includes the final return for the last year.
Which final return is needed depends on how the LLC is taxed:
- Single-member LLC owned by a US person, default treatment: no separate LLC return. The last year goes on the owner's Form 1040 (Schedule C, E or F).
- Multi-member LLC, default treatment as a partnership: a final Form 1065 with a Schedule K-1 for each member.
- LLC taxed as an S corporation: a final Form 1120-S with K-1s. LLC taxed as a C corporation: a final Form 1120, and corporations generally also file Form 966 after deciding to dissolve.
- Foreign-owned single-member LLC: Form 5472 attached to a pro forma Form 1120, for every year including the final one.
Check the "final return" box where the form has one. If returns from earlier years are missing, they usually have to be filed too before the IRS closes the account. Our guide on the LLC final tax return goes into more detail.
We do not prepare or file tax returns. The final return is filed by you or your accountant.
Confirmation comes by mail
The IRS does not confirm by email or online. It sends a letter by mail to the address it has on file for the LLC. This can take several weeks. Until it arrives, you have no written proof that the account is closed.
That is why you should keep a working mailing address for the LLC until the confirmation arrives. If the IRS has an old address, or if mail goes to a registered agent you have already cancelled, the letter may never reach you. Our guide on cancelling the registered agent after dissolution explains the right order.
When the confirmation arrives, keep it with the LLC's other closing records.
What happens if you skip it
If you dissolve the LLC with the state but never write to the IRS, the business account usually stays open. The IRS can keep expecting returns. If it does not receive them, it may send notices, and in some cases assess penalties for missing returns. You might not see those notices if the LLC's mail goes to an old address.
Closing the account does not remove anything you already owe. But it does tell the IRS clearly that the business has ended, so it stops expecting new returns after the final one.
When to send the letter
The usual order is:
- Dissolve the LLC with the state and get the state's confirmation.
- Make sure the final federal return is filed and any tax is paid.
- Send the letter to the IRS to close the business account.
- Wait for the IRS confirmation by mail.
For the full list of steps, see our LLC closing checklist and the guide on how to dissolve an LLC.
How we handle it
Our Dissolution and EIN closure package costs $449 plus the state fee. We dissolve the LLC with the state, then prepare the IRS letter with the details above, ready for one signature. We send it to the IRS for you. The IRS replies by mail to the LLC's address on file. We work with a network of independent, licensed CPAs and tax advisors.