Discussion:EIN number- need new one???
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Discussion Forum Index --> Tax Questions --> EIN number- need new one???
| 8 September 2010 | |
| I have a SMLLC (sole prop) that was organized in June of 2010. SHe had no income or expenses (except the LLC formation fees) and is now looking to take on a Partner (keeping same biz name). In reading the EIN rules, if you are a sole prop going to a partnership you need a new EIN. Okay, pretty clear.
BUT, they do not discuss LLC's except in how they are filing payroll taxes. So do I ASSUME that I follow the rules for how the entity is taxed to determine the proper EIN rules to use??? http://www.irs.gov/businesses/small/article/0,,id=98011,00.html Just do not want to ASSUME anything!! I was hoping to just file an 8832 and be done, but it does not look that way. | |
Michaelstar (talk|edits) said: | 8 September 2010 |
| The EIN assigned to the LLC is the EIN you use. The fact that the SMLLC and now will become a MMLLC does not cause a need to apply for a new EIN.
If you did, you'd be making a mistake that you would just later need to correct. | |
Pink Pearl (talk|edits) said: | 8 September 2010 |
| What about this theory then????
If a “disregarded entity” is owned by an individual, it is treated as a sole proprietor so if this is true then..... Sole Proprietors You will be required to obtain a new EIN if any of the following statements are true. You are subject to a bankruptcy proceeding. You incorporate. You take in partners and operate as a partnership. You purchase or inherit an existing business that you operate as a sole proprietorship | |
| 8 September 2010 | |
| Pink...you nailed my quandary on the head, and Mike I agree, the potential for a nightmare is what I am seeing. Have EIN of SMLLC that essentially exists for 3 months with no income, no expenses except LLC fees, and then an NEW EIN with same biz name.
If I had not read the EIN rules, I would have just filed an 8832, but the instructions seems to point you to the EIN rules. Something so simple yet so not clear. | |
Michaelstar (talk|edits) said: | 8 September 2010 |
| Pink is pointing out why an EIN needs to be applied for - I agree with all of his points. Reason - a change of entity.
A SMLLC becoming a MMLLC is NOT a change of entity which would require applying for an EIN. Thus in your situation - there is not a need to apply for a second EIN for this entity. | |
| 8 September 2010 | |
| Mike..Can you refer me to the IRS pub/instruction/something that cnofirms. I don't doubt you but need some backup. Called IRS today and they told me needed new EIN!! Don't trust them either! | |
Michaelstar (talk|edits) said: | 8 September 2010 |
| Okay - you had me second guessing myself on this - so I went back and re-read the instructions to the SS-4 and also looked at Form 8832.
On page 2 of the SS-4, look at footnote #2. "However, do not apply for a new EIN if the existing entity only (a) changed its business name, (b) elected on Form 8832 to change the way it is taxed (or is covered by the default rules), (c)......" - you can read it - does not apply here. In your situation - you are covered under the default rules. Also read page 4 on the SS-4 instructions under "disregarded entities". So then I called the SS-4 dept (IRS) and asked them to confirm my line of thinking and conclusion - they said I was correct - that unless the SMLLC was changing their name - when a SMLLC converts to a MMLLC - UNDER THE DEFAULT RULES - then no new EIN is required. Now - this I did not know - I was told that one would need to write a letter to the IRS - Entity Dept., and inform the IRS that as of xx date, that this SMLLC is changing to a MMLLC. The IRS will manually change the filing requirement for this entity from a 1040, Sch C to a Form 1065. You can fax it to (801) 620-7116 which was the number I was provided being here in CA. | |
| 9 September 2010 | |
| Mike...okay that was above and beyond the call of duty and you have MANY thanks from me. Now that you mention it I did see that note on the SS-4....and I guess forgot that I read it or got confused by the other info on the IRS website. I was hoping that a new EIN was not required. Initially I went right to the 8832 thinking it was all I needed, then realized I was okay under default rules (as you too concluded)...something led me astray though. Can't remember now.
What was the number for the SS-4 unit??? I called the (800) 829-4933 and that's who told me new EIN was required...maybe I did not explain right, or maybe the girl did not give me the right info. I am leaning towards the latter. I have not had good luck lately with the IRS. Again...MANY MANY thanks. I hope I can return the favor at some point. | |
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| 3 October 2013 | |
| H/W MMLLC taxed as partnership. W never participated so gifts her share to H. I'll file final 1065 with schedule C going forward. H will continue to operate under same name. Getting a new EIN would create problems with bank accounts and W-9's in the hands of his many clients, so we'd like to keep the same EIN if possible, but instructions and discussions are not clear. Is it sufficient to change classification with form 8832, include original LLC name and EIN on schedule C and hope the "final" box checked on 1065 will keep the IRS from sending notices, or is a new EIN absolutely required? | |
| 3 October 2013 | |
| "You are subject to a bankruptcy proceeding. You incorporate. You take in partners and operate as a partnership."
The IRS is referring to the Partnership entity for legal purposes. A MMLLC is an LLC treated as a partnership for tax purposes, NOT a partnership legally. | |
| 3 October 2013 | |
| Dsuh...I think you are responding to the original 3 year old post, not mine, correct? | |
