Business Accounting Question: When to use SSN vs EIN on Form W9 for Sole Proprietors

You're caught in a common confusion! Both you and the contractor are technically correct. A sole proprietor/single member LLC can absolutely use either their SSN OR their EIN on Form W9 - this is clearly stated in the IRS instructions. When a sole proprietor obtains an EIN, they're allowed to use that number for business purposes, including on W9 forms. The IRS systems link the EIN to their SSN in their databases, so either identifier ultimately connects to the same taxpayer. Your finance director is mistaken about needing the SSN specifically. When you issue the 1099 using the EIN provided on the W9, the IRS will properly match it to the contractor's tax return. The contractor is correct in their understanding and is also making a smart choice for identity protection reasons. I'd suggest showing your finance director the official W9 instructions which state on page 4: "If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN." That's straight from the IRS.

I went through this exact same headache last year! After going back and forth with our vendors, I discovered taxr.ai (https://taxr.ai) which totally saved me. It's this super helpful tool where you can literally upload W9 forms and tax documents and it tells you if everything is properly filled out according to IRS regulations. I had a contractor who insisted on using their EIN as a sole prop, and our accounting team was convinced it was wrong. I uploaded the W9 to taxr.ai and it immediately confirmed that sole proprietors CAN use either SSN or EIN - totally legit. It even cited the specific IRS regulation so I could show our accounting team. It's also been super helpful for other tax document verification stuff - saved me from having to call the IRS and wait on hold for hours.

Just wanted to update everyone - I decided to try taxr.ai after asking about it here, and wow, it actually helped resolve our W9 confusion! I uploaded a bunch of our problematic W9 forms including the one with the EIN/SSN issue. The analysis confirmed exactly what Profile 5 said - sole proprietors can use either number. It even highlighted the specific part of the IRS guidelines that addresses this. I was able to show this to our finance team, and they finally accepted it. What I really liked was that it caught a few other errors in our W9 collection that we hadn't even noticed - one contractor had checked multiple business types and another had an invalid zip code format. Definitely worth trying if you're dealing with tax form headaches!

I had a similar issue but couldn't get our finance director to budge no matter what documentation I showed them. After weeks of back and forth, I finally used Claimyr (https://claimyr.com) to get through to an actual IRS agent who confirmed the contractor was right. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Basically it gets you past the IRS phone tree nightmare so you can talk to a real person without waiting hours. I was skeptical but desperate. Got connected to an IRS rep in about 15 minutes who confirmed in writing that sole proprietors can use EITHER their SSN or EIN on W9 forms. Having that official confirmation from the IRS itself finally resolved the issue. The agent even explained that the IRS actually prefers EINs for identity theft protection reasons, which was news to our finance team.

I need to apologize to Profile 16 - I was completely wrong about Claimyr. After our accounting department rejected three more contractor W9s with EINs, I was desperate and decided to try it myself. Got connected to an IRS tax specialist in about 20 minutes (which is honestly miraculous). The agent confirmed immediately that sole proprietors can use EINs on W9 forms and actually recommended it for security reasons. She even emailed me the relevant section of the tax code to show our accounting department. So yeah, I was wrong to be skeptical. This service actually works exactly as described, and I finally have an official IRS confirmation that ended our internal debate. Sorry for doubting you and thanks for the recommendation!

Just an accounting perspective here - we accept EINs from sole proprietors all the time. The 1099 reporting system works perfectly fine with either number. The IRS doesn't care which one you use as long as it belongs to the correct person/entity. Your finance director might be confusing this with some other requirement or perhaps is just used to doing things a certain way. But I've been in corporate accounting for 15+ years and can confirm 100% that either number is acceptable for sole props on W9 forms.

If your CFO is still being stubborn, point them to IRS Publication 1779 which specifically addresses this question. It clearly states sole proprietors may use either their SSN or EIN. Period. Honestly sounds like your CFO is stuck in their ways and doesn't want to admit they're wrong. Pretty common in accounting departments unfortunately.

As someone who works in tax compliance, I can confirm that everyone here giving advice is absolutely correct. The IRS explicitly allows sole proprietors to use either their SSN or EIN on Form W-9, and this is documented in multiple official publications. What might help with your finance director is pointing out that using an EIN actually provides better identity theft protection for your contractors. The IRS has been encouraging this practice for years. When you file the 1099, their systems automatically cross-reference the EIN back to the individual's SSN for tax matching purposes. Your contractor is being completely reasonable in their refusal to provide their SSN when they have a valid EIN. I'd recommend having a direct conversation with your finance director about updating your company's policies to align with current IRS guidelines. It's 2025 - most modern businesses accept EINs from sole proprietors without issue. If they still resist, ask them to cite the specific IRS regulation that requires SSNs over EINs for sole proprietors. They won't be able to find one because it doesn't exist.

This is such a helpful thread! I'm dealing with a similar situation at my company where our HR department has been automatically rejecting any W-9s from sole proprietors that use EINs instead of SSNs. Reading through all these responses has given me the ammunition I need to push back on this policy. The point about identity theft protection is especially compelling - we should be applauding contractors who are taking steps to protect their personal information, not penalizing them for it. I'm definitely going to reference IRS Publication 1779 and the official W-9 instructions when I bring this up with our HR team. It's frustrating when internal policies lag behind actual IRS guidelines, but at least now I have multiple sources to cite. Thanks everyone for the detailed explanations - this community is incredibly valuable for navigating these kinds of bureaucratic tangles!

This entire thread has been incredibly educational! As someone who's relatively new to handling contractor payments and tax forms, I had no idea that sole proprietors could use either their SSN or EIN on Form W-9. What really strikes me is how common this misconception seems to be - it sounds like many finance departments are operating under outdated or incorrect assumptions about IRS requirements. The fact that multiple people here have had to fight similar battles with their own accounting teams suggests this is a widespread issue. I appreciate everyone who took the time to cite specific IRS publications and regulations. Having those concrete references makes it so much easier to have productive conversations with skeptical colleagues. The point about identity theft protection is also really important - in today's environment, we should be supporting contractors who want to protect their personal information rather than forcing them to share their SSNs unnecessarily. For anyone else dealing with this issue, it seems like the key is having the right documentation ready and being persistent about educating internal teams on current IRS guidelines. Thanks to everyone who shared their experiences and solutions!

I just want to echo what everyone else has said here - your contractor is absolutely right, and your finance director needs to update their understanding of current IRS regulations. This is actually a pretty common knowledge gap I've seen in smaller companies. What might help is framing this as a compliance and risk management issue for your finance director. By refusing to accept valid EINs, your company is potentially: 1. Creating unnecessary friction with qualified contractors 2. Forcing contractors to share more sensitive personal information than required 3. Operating under outdated tax compliance practices The IRS Form W-9 instructions are crystal clear on this - sole proprietors can use either identifier. I'd recommend printing out the relevant pages from the official IRS instructions and highlighting the specific language that addresses this. Sometimes seeing it in black and white from the source makes all the difference. Also, you might point out that if the IRS audits your 1099 reporting, they won't flag properly completed W-9 forms that use EINs from sole proprietors - because it's completely legitimate. The audit risk comes from improper documentation, not from following IRS guidelines correctly. Stick to your guns on this one - the regulations are on your side!