The Mystery of the Shifting ID Numbers | AccountingWEB

The Mystery of the Shifting ID Numbers

Although, coincidentally, both of these cases are related to household employees; the issues really have nothing to do with Schedule H.

Case 1 - A tax professional was trying to finish up her own annual tax return this year and found herself having a problem with the state filing for the household employee. She had been filing and paying on this same individual for nearly a decade without problems.

What happened?

She got divorced in 2006. She sorted out the usual variety of mutual and non-mutual assets, liabilities, etc.  Then, when blithely on her way with her life.

Suddenly, 6 years later, the state of Illinois tells her that the employer ID number she’s been filing and paying under is closed. It was never hers. It seems that the EIN had been issued under her husband’s name and Social Security number.

Solution: Naturally, she got a new EIN immediately in order to take care of the problem. That’s no big deal.

Lesson: It was a surprise – and gives another thing to watch for during divorces – list all EINs used by the couple and sort out which is whose – and/or apply for new ones, if necessary


Case 2 – An EA had been preparing the payroll for a doctor’s household employee for many years. The EA had properly filed all the relevant payroll tax returns with the State of California. She was certain the client’s wife had always paid all the quarterly payments, since the woman was a stickler for deadlines. They were in close contact.

The EA did not prepare their personal tax returns. Those were prepared by a CPA in Beverly Hills. So she never saw how they handled the Schedule H reporting.

Suddenly, after years of working together like this, the clients get a notice from the IRS about a new EIN having just been issued for this payroll arrangement. After a very unpleasant experience with the IRS lady at the phone number on the new notice, the EA called the Practitioner Priority Service to sort out the problem. She was able (after faxing over a ton of documentation) to prove that they have been using the correct EIN all these years – and have been filing and paying properly.

So, where did the new EIN come from?

The CPA had been filing the Schedule H without entering the EIN.


I must admit, we’re still sitting here, scratching our heads, wondering how this CPA managed not to get an error message from his software. What did he do? Not investigate? Not ask any questions? Not ask for the payroll documents before filling out the Schedule H? Did he just shrug it all off and file the tax returns on paper?  A great reason for the IRS’s insistence on electronic filing.

This was sufficiently disturbing to the client to seek out a new CPA. (Note: This particular EA works with a CPA firm – who picked this doctor up as a client.)

Lesson: What did we learn here? I don’t know. Surely, there can’t still be many practitioners out there who do such sloppy work. To the rest of us? I think there are three lessons here:

  1. The IRS will issue new EINs if you don't use one where needed.
  2. Where EINs are needed, if you don’t see one – ask for it.
  3. Anytime you prepare any form or schedule that is based on the results of (or data from) other forms or schedules – get copies of them.
    1. Payroll tax amounts – get copies of payroll tax returns
    2. Payroll amounts – get copies of the payroll tax returns
    3. Sales – get copies of the sales tax returns
    4. Sales taxes – get copies of the sales tax returns



Getting the idea?

New things to pay attention to - making sure you have the correct ID numbers

This blog

Eva Rosenberg, MBA, EA, is the publisher of, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.

More from this blog

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.


Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.


Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.


Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".


William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.


Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (, a software development firm of high-volume, high-productivity accounting and payroll technology.


Eva Rosenberg, MBA, EA, is the publisher of, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.


Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website:
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.


The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.


FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.


Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.


Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of a website devoted to training for governmental auditors.


AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too! Members of our British team who publish share their ideas, insights, and perspectives from across the pond.