Tax Information With A Mother's Touch
Published by Eva Rosenberg, MBA, EA
Volume 6, Issue 276 September 17, 2004
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Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 276 September 17, 2004 |
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 Last week, Bill from Scotch Plains, NJ asked: Dear TaxMama, [See Article Here] <TaxPro Replies> Bill Simon of www.gsblaw.com in Washington, DC comments: Assuming that the owner accepts the classification of the LLC as a disregarded entity (the smart thing to do about 99.5% of the time): The LLC should use the owner's SSN for all income tax purposes, e.g., when completing a W-9 or supplying a number to banks, brokers, clients, etc for reporting on 1099 forms, when the LLC is a partner in a partnership (or a member of another LLC) and will get a K-1, etc. The EIN was probably issued to the LLC (or its owner) for reporting employment taxes for the LLC's employees. See page 4 (top of the right-hand column) of the instructions for Form SS-4, and IRS Notice 99-6, 1999-3 IRB 12. The extent to which a member of an LLC (whether or not a single-member LLC) is shielded from personal liability is primarily a function of state law, and is simply not affected by use of the owner's SSN. The steps that an LLC member must follow to minimize the risk of personal liability are essentially the same as the things that shareholders of a corporation must do. (More information on request if you need it) So the LLC owner can use his SSN without worry. ( I wish I had a dollar for every time clients asked me whether making an S election rendered the shareholders of a corporation personally liable for all the corporation's debts. The answer, of course, is no -- and come to think of it I probably do have those dollars, since I charged for my time.) L' Shanah Tovah Bill Simon Garvey Schubert Barer Washington, DC www.gsblaw.com [TaxMama looked up the information - and to my shock, he IS correct. Then, why did IRS send poor Bill in Scotch Plains, NJ a letter asking for his tax return under the EIN they issued? No wonder people get confused?]  |
 
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| Library of Congress - ISSN 1532-0790 Copyright © 2000-2007 - Eva Rosenberg |
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