An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses and organizations for tax purposes. It functions like a Social Security number for a business, helping to identify it in various financial and tax-related transactions. EINs are required for various activities, such as opening a business bank account, filing tax returns, and hiring employees. Most businesses, including corporations, partnerships, and nonprofits, need an EIN, while sole proprietors may not unless they have employees or meet certain criteria.