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The US IRS classifies certain business entities as "disregarded" for tax purposes: business income is considered personal to the owner. The IRS says this term applies only to single-owner LLCs (not partnerships, S-corps etc).

However, I've had a sole prop/DBA for many years that has its own identity, mailing address and EIN. I report on schedule C using this separate EIN. All invoicing, banking, advertising etc is done under the entity name. This is a close parallel to a single-owner LLC, but it isn't one -- it's been around longer than those.

I'm trying to set up a Kindle self-publishing arrangement with Amazon but in the 'tax interview' they seem to think this arrangement can't exist -- at least they don't have a slot for it. If I'm a DBA, they want to use my SSN, saying that sole props don't have separate EINs. And yet... I do, and I want to use it and the entity name and bank account.

Is there something I'm missing here? Is my DBA really a 'disregarded entity' even though it doesn't fit the IRS criteria?

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Since the income is reported on your personal return via Schedule C, your business is a disregarded entity. Having an EIN doesn't change that status, it just allows you to not use your SSN for everything.

Amazon may be unnecessarily rigid, but according to the IRS you don't need an EIN if you don't:

  • Have employees.
  • Operate your business as a corporation or a partnership.
  • File any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms
  • Withhold taxes on income, other than wages, paid to a non-resident alien.
  • Have a Keogh plan.
  • Involved with any of the following types of organizations:
    • Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
    • Estates
    • Real estate mortgage investment conduits
    • Non-profit organizations
    • Farmers' cooperatives
    • Plan administrators

So Amazon is probably just using your lack of need for an EIN as a rule that you shouldn't have one, might contact their support since you want to use the EIN.

  • Thanks. I did at one time need an EIN, but that part of the business went away some years ago. It never occurred to me to abandon it, but I can see how it's become unnecessary. I don't like being disregarded, though (-: – Jim Mack Sep 25 '18 at 19:58
  • @JimMack If only they'd disregard the income too, ay? – Hart CO Sep 26 '18 at 0:51
  • I don't think it would be worth the effort to try to convince someone at Amazon to take your EIN instead of your SS#. Sounds like a huge headache. You'd be better off just giving them your SS#. – gaefan Sep 26 '18 at 13:35

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