SMLCC: effect of notice 99-6 being obsolete?

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Subject Author Date SMLCC: effect of notice 99-6 being obsolete? walterbyrd 10-01-2009  Re: SMLCC: effect of notice 99-6 being obsolete? Brew1 10-01-2009  Re: SMLCC: effect of notice 99-6 being obsolete? Alan 10-01-2009   Re: SMLCC: effect of notice 99-6 being obsolete? Steve Pope 10-02-2009  Re: SMLCC: effect of notice 99-6 being obsolete? Alan 10-02-2009   Re: SMLCC: effect of notice 99-6 being obsolete? Steve Pope 10-02-2009  Re: SMLCC: effect of notice 99-6 being obsolete? Wallace 10-02-2009   Re: SMLCC: effect of notice 99-6 being obsolete? Steve Pope 10-02-2009
Posted by walterbyrd on October 1, 2009, 11:39 am Please log in for more thread options This confuses me: > "After January 1, 2009, Notice 99-6 is obsolete and the SMLLC will be responsible for collecting, reporting and paying over employment tax obligations using the name and EIN assigned to the LLC." http://www.irs.gov/businesses/small/article/0,,id=158625,00.html What if the LLC is a sole proprietorship, and does not have employees? -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Brew1 on October 1, 2009, 2:22 pm Please log in for more thread options > This confuses me: > > > "After January 1, 2009, Notice 99-6 is obsolete and the SMLLC will be responsible for collecting, reporting and paying over employment tax obligations using the name and EIN assigned to the LLC." > > http://www.irs.gov/businesses/small/article/0,,id=158625,00.html > > What if the LLC is a sole proprietorship, and does not have employees? > > you don't have to have an EIN--what tends to happen in situations like yours is, after the application, you get a letter from the IRS "wondering" why you haven't been filing 940/941's. I agree it's not written very well; bottom line--don't apply for an EIN if you don't need one. And if you do, make sure you check the correct box on the application as to why you need one. You also have to be careful, as a sole proprietor, when sending in estimated payments--I had a client who wrote his EIN (instead of his SSN) on an estimated payment and it created a real mess. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on October 1, 2009, 4:12 pm Please log in for more thread options walterbyrd wrote: > This confuses me: > >> "After January 1, 2009, Notice 99-6 is obsolete and the SMLLC will be responsible for collecting, reporting and paying over employment tax obligations using the name and EIN assigned to the LLC." > > http://www.irs.gov/businesses/small/article/0,,id=158625,00.html > > What if the LLC is a sole proprietorship, and does not have employees? > I'm not sure where you are coming from on this. A single member LLC (SMLLC) that is not a corporation is a sole proprietorship (SP). An SP without employees does not require an EIN and does not collect employment taxes. An SP with employees, requires an EIN and is required to collect & remit employment taxes. An SMLLC with employees must also have an EIN. Prior to 2009, an SMLLC that was an SP and had employees could remit employment taxes using either the LLC name & EIN or the sole proprietors EIN and name. Alas, this is no more. The SMLLC with employees must now use the LLC name & EIN to remit employment taxes. The owner is still responsible for collection and remittance. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Steve Pope on October 2, 2009, 4:46 pm Please log in for more thread options >I'm not sure where you are coming from on this. A single member >LLC (SMLLC) that is not a corporation is a sole proprietorship >(SP). An SP without employees does not require an EIN and does >not collect employment taxes. An SP with employees, requires an >EIN and is required to collect & remit employment taxes. I'd change that to "a sole proprietorship without employees doesn't necessarily require an EIN", as there are other triggers for requiring an EIN, such as establishing a qualified plan. It's also not totally clear to me you can form an LLC (at least in California) without obtainin an EIN. If the CA-SMLLC just uses the individual's SSN, this clouds the distinction between assets of the LLC and personal assets that are shielded from liability. It would seem to me problematical to do it this way. Here is what California has to say: Employer Identification Number (EIN) - Do I Need One? Though it's commonly called an employer Identification Number (EIN), there are times when you may need an EIN even though you do not have employees. An EIN can be used to identify a business entity that is legally separate from yourself, such as your corporation, partnership or retirement plan. Generally, businesses need an EIN. One exception is a sole proprietor with no employees. However, sole proprietors who must pay federal excise or payroll taxes will need an EIN, too. (From http://www.taxes.ca.gov/doingbus3.shtml ) S. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on October 2, 2009, 5:42 pm Please log in for more thread options Steve Pope wrote: > >> I'm not sure where you are coming from on this. A single member >> LLC (SMLLC) that is not a corporation is a sole proprietorship >> (SP). An SP without employees does not require an EIN and does >> not collect employment taxes. An SP with employees, requires an >> EIN and is required to collect & remit employment taxes. > > I'd change that to "a sole proprietorship without employees > doesn't necessarily require an EIN", as there are other triggers > for requiring an EIN, such as establishing a qualified plan. > > It's also not totally clear to me you can form an LLC (at least > in California) without obtainin an EIN. If the CA-SMLLC just > uses the individual's SSN, this clouds the distinction between > assets of the LLC and personal assets that are shielded from > liability. It would seem to me problematical to do it this way. > > Here is what California has to say: > > Employer Identification Number (EIN) - Do I Need One? > > Though it's commonly called an employer Identification > Number (EIN), there are times when you may need an EIN > even though you do not have employees. An EIN can be > used to identify a business entity that is legally > separate from yourself, such as your corporation, > partnership or retirement plan. Generally, businesses > need an EIN. One exception is a sole proprietor with > no employees. However, sole proprietors who must pay > federal excise or payroll taxes will need an EIN, too. > > (From http://www.taxes.ca.gov/doingbus3.shtml ) > > S. > I agree that there are other reasons why an SP without employees might require an EIN. I don't agree that CA requires an EIN for an SMLLC operating as an SP. Last time I looked, CA conformed to the federal rules on EINs. An SMLLC acting as a sole proprietor would only require an EIN using the rules already discussed (employees, qualified plan, etc.). These are the federal rules found at: http://www.irs.gov/businesses/small/article/0,,id=97872,00.html I checked "Starting A Business In California" by Talamo & Warda and they also say that an EIN is not necessarily required by an SMLLC. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Will I get a notice from the IRS? May 24, 2007, 11:30 pm IRS notice questions June 8, 2007, 1:21 pm IRS Notice Of Rebates -- Believe It Or Not March 8, 2008, 6:50 am What a K-1 matching notice? 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