A Federal ID Number, also known as an Employer Identification Number (EIN), is a unique identification number assigned by the U.S. Internal Revenue Service (IRS) to businesses and organizations for tax purposes. It is used to identify and track the financial activities of a business entity, such as filing tax returns, paying taxes, and reporting employee wages.

Example
ABC Company obtained a Federal ID Number from the IRS when they registered their business. This number is used on their tax returns and other official documents to identify the company for federal tax purposes.