Business can be defined as an activity that one does as a means of earning a living. Most people think of a business as something larger, more commercial, and, often, more corporate. When thinking of a business like that, many will conjure up the image of a factory or large office building. The Internal Revenue Service includes into this definition those who are engaged in or organized for non-profit or charitable purposes. A business is an entity like a corporation, trust, partnership, charity or one of any other form of organization. Many of these businesses are subject to federal taxation of their income. Others, like some religious and non-profit groups, are exempt from paying a federal income tax. There are large businesses, small businesses and self-run, single proprietor businesses that also are subject to taxation. All of these businesses are seen as taxpayers in the eyes of the U.S. government.

A business example can range from the large such as Starbucks™ to the small corner store that sells food and other sundries. A regular taxpayer has their own tax identification number commonly known as a Social Security Number (SSN). If that taxpayer decides to open and operate a business, they would have to secure another tax identification number in order that their business can report its income and be taxed on it. This is true whether it is a large corporation or businesses run from someone’s private residence. Even charities, which may not be taxed, are required to have this.