Why Do I Need an IRS Number When Importing Into the U.S.?



{This post was last updated on August 9, 2017}

You have made your sale, shipped the goods to the U.S. buyer, and the shipment is on its way to the border. And then, without warning, the goods get stopped at the port of entry, and the customs broker for this shipment requests an IRS number. At this point, you are likely wondering what an IRS number is and why it’s needed. To help you understand, let’s dive into this scenario a little deeper.

What is Internal Revenue Services (IRS) Tax Number and Why is it Required?

First off, all goods entering the U.S. from overseas are considered Imports and U.S. Customs and Border Protection (CBP) must approve all Imports for entry. CBP requires documentation which includes shipment details such as the identification of the Ultimate Consignee. An Ultimate Consignee is a person, party, or designee that is located in the U.S. and will receive the shipment (which is usually the buyer of the goods). An Internal Revenue Service (IRS) number, is used by CBP to identify the Ultimate Consignee.

There are two types of IRS numbers:

  1. Employer Identification Number (EIN): Issued to business entities
  2. Social Security Number (SSN): Issued to individuals

 

Without an IRS number, CBP does not know who the Ultimate Consignee is and therefore will not accept the shipment into the U.S.

U.S. Customs states the following.

 

(Source: CUSTOMS DIRECTIVE NO. 3550-079A )

 

Will One IRS Number Cover a Host of Different Goods Sold to One Consignee?

The IRS/EIN or SSN is specific to the Ultimate Consignee as the IRS issues these numbers directly to the company or individual. Therefore, if someone in the U.S. buys a host of products from you, you would declare the IRS number for that buyer on the entry declaration to U.S. Customs.

If you have more than one buyer, then it is best to make a declaration per transaction and declare the IRS number for each buyer in each transaction.

My Shipment DID Have an IRS Number. Why Was it Stopped?

If you run into this scenario, and your import documentation included an IRS number, it could be for one of two reasons. First, the Ultimate Consignee of the shipment had never purchased goods from a foreign party and therefore is not in U.S. Customs database.

Another likely culprit for this delay could be a deactivated account. Deactivation happens when more than a year has passed since the Ultimate Consignee last received an import.  

If the IRS number is not on file or has been deactivated by U.S. Customs, then it will need to be added to their database by filing a Customs Form 5106.

What is a Customs Form 5106?

A Customs Form 5106 is used by U.S. Customs to input the name, physical address, and IRS number of the Ultimate Consignee into their database.  The Customs Form 5106 must be on file for all consignees at the time of entry.

Is a 5106 Required for Every Shipment I Send to the U.S.?

U.S. Customs states that “An importer identification number shall remain on file until one year from the date on which it is last used on Customs Form 7501 or request for services.” This means that as long as the Ultimate Consignee continues to receive goods on a regular basis, this form will only have to be completed once.  If their 5106 importer record is not used for over a year, then they will have to reactivate their number.

How Can I Determine if the U.S. has a Customs Form 5106 on File for the Consignee/Buyer?

Your customs broker can query the Ultimate Consignee information with U.S. Customs and advise you if they have an active 5106 on file.   This is a simple, and proactive step that can save you a lot of hassle.

How Do I File a Customs Form 5106?

If a 5106 is not on file,  you need not worry as your customs broker can supply you with one. You can then ask your buyer to fill it out. One you have received it back from your buyer, you can provide it to your custom broker, who will then submit it to Customs. CBP will then add it to their database.

In summary, if you are selling to U.S. buyers from outside of the U.S. and you are responsible for declaring the goods at the port of entry, you must ensure your buyer has an IRS number. If they do not, work with your customs broker to get one. We are here to help!

 

 

What to learn more about importing into the U.S.?

Get a comprehensive understanding of the process involved with our webinar on U.S. Importing for Beginners [Part 1] (just so you know…it’s free!). Take your learning a step further by attending the U.S. Importing for Beginners [Part 2] webinar and delve into the details previously touched upon in part one of the series.

 

Do you have questions or comments regarding importing to the U.S.? Please leave them in our comments section below and I will be happy to provide an answer.

 

 

 

 

 

8 Responses to “Why Do I Need an IRS Number When Importing Into the U.S.?”

  1. Viva says:

    Do I need to have different IRS numbers for different goods or it is unique number for each buyer and we can import different goods under one number.

  2. Breanna Leininger says:

    Hello Viva,

    The IRS/EIN number or SSN number is specific to the buyer as the IRS issues these numbers directly to the company or individual. For importing purposes you would need to provide the IRS/EIN or SSN number for the buyer for your US Customs declaration. So, if someone buys a host of products from you, you would declare the IRS number for the buyer. If you have more than one buyer then it is best to make a declaration per transaction and declare the IRS number for each buyer in each transaction. We hope that answers your question, if you need any further assistance we are here to help.

    Best Regard,

    Breanna Leininger
    Compliance Supervisor
    Pacific Customs Brokers USA, Inc.

  3. Tara says:

    Customer in US is requesting we ship to a freight forwarder in TX. They are refusing to supply us the EIN#, however our sale is to the US and we have to clear the products going into the US. They will later ship the freight to MX but that is not part of our sale. How do I explain that the tax ID is required?

  4. Breanna Leininger says:

    Hello Tara,

    We often see this situation, especially if goods are only staying in the U.S. temporarily. In some cases those goods will arrive into the U.S. and enter under a Transportation & Exportation bond if they will be exporting in less than 30 days. In that case a bonded carrier is required, they must go to a bonded warehouse, and the IRS number for the consignee is not required.

    However, if the goods are clearing into the commerce of the U.S. under a formal or informal entry then the IRS number for the consignee is required even if a subsequent export will take place at sometime in the future. In most cases the consignee is the U.S. buyer, and the federal tax identification number (IRS, EIN, or SSN) is required for entry. In some cases however, the buyer is not a U.S. based party and in that case the federal tax identification number for the physical location of the goods is required. This is often a warehouse in this case.

    In your conversation with the freight forwarder regarding this you can refer them to the US Customs article Amendment to the Current Reporting Requirements for the Ultimate Consignee at the Time of Entry or Release, as well as section seven of the US Customs Directive 3550-079A. The links to both of these resources is listed below in order as referenced.

    We hope this answered your question. If you need any further assistance please feel free to contact us anytime, we are happy to help.

    Resources:

    http://www.cbp.gov/border-security/ports-entry/cargo-security/cargo-control/ult-consignee

    http://www.cbp.gov/document/directives/3550-079a-ultimate-consignee-time-entry-release

    Best Regard,

    Breanna Leininger
    Operations Manager
    Pacific Customs Brokers USA, Inc

  5. Piolo says:

    this means that if I would like to ship goods from my company in Switzerland, free delivered to my customer in US, I need to get the IRS number from my customer, and that they have to pay for the import ? so a “real” DDP shipment is not possible ?

  6. Dina says:

    We are interior designer in Dubai and we have project in Florida, USA. We want to purchase the entire furniture from Italy to Dubai, then Dubai to Florida Orlando.

    So from Dubai to Orlando door to door, we will issue an invoice from our company VSHD. What will be the requirement?

  7. NADINE HEBERT says:

    Hi,
    Does this also apply to PRODUCT SAMPLES – NO COMMERCIAL VALUE ?

  8. Walter says:

    Thanks for the info. I have a question from the buyer/ “ultimate importer” perspective. Does the US entity receiving the items have any ongoing obligations besides providing the supplier with their EIN/ identification info through form 5106? Do they need to have any interactions with the broker or retain any records from the “Entry” process?

    Also, what if the purchaser is immediately re-selling the imported goods? E.g., our US customer is a distributor and is having our product shipped directly to a customer of their own (elsewhere in the US). Do we need two 5106s in that case– one for our direct customer and another for THEIR customer?

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