Wisconsin LLC, EIN and tax forms


D

dan.cardinal

Hello,

I created a Wisconsin LLC in 2006. I then obtained an EIN from the
IRS. When I obtained the EIN I was thinking of the LLC as a
partnership and therefore checked Partnership for "Type of Entity".
The LLC has been dormant since inception but to keep the IRS happy I
filed a Form 1065 for it with no income/expense for the 2006 tax year.

I've now come to realize that the extra hassle of having the IRS tax
the LLC as a Partnership is not worth it and I would rather them tax
it as disregarded/sole-proprietorship. Upon reviewing the Wisconsin
Articles of Organization for the LLC there is no listing of Members
(there is a listing of Organizers but I don't think those are members)
so it would seem to me that the easiest way to change the IRS's
classification of the LLC is to fill out a Final Form 1065 using the
EIN I already have for the 2007 tax year and then obtain a new EIN
with a disregarded entity type for future use (thereby eliminating the
IRS requirement of a Form 1065). Does that sound like a reasonable
approach?

I guess the main thing I'm looking to confirm is whether the state of
Wisconsin needs to be notified of this change--I strongly suspect not
because I don't think they even know/care who the "members" of the LLC
are. I actually called the IRS about this last tax season and they
said I should fax the revised articles of organization to them.
However, since I see no need to revise the articles of organization
(again, since no members are listed) I suspect that was incorrect
advice and that it will be easier and just as legitimate to just scrap
the old EIN and get a new one.

Thanks in advance for any help.
 
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P

Paul Thomas, CPA

I created a Wisconsin LLC in 2006. I then obtained an EIN from the
IRS. When I obtained the EIN I was thinking of the LLC as a
partnership and therefore checked Partnership for "Type of Entity".
The LLC has been dormant since inception but to keep the IRS happy I
filed a Form 1065 for it with no income/expense for the 2006 tax year.

I've now come to realize that the extra hassle of having the IRS tax
the LLC as a Partnership is not worth it and I would rather them tax
it as disregarded/sole-proprietorship. Upon reviewing the Wisconsin
Articles of Organization for the LLC there is no listing of Members
(there is a listing of Organizers but I don't think those are members)
so it would seem to me that the easiest way to change the IRS's
classification of the LLC is to fill out a Final Form 1065 using the
EIN I already have for the 2007 tax year and then obtain a new EIN
with a disregarded entity type for future use (thereby eliminating the
IRS requirement of a Form 1065). Does that sound like a reasonable
approach?

I guess the main thing I'm looking to confirm is whether the state of
Wisconsin needs to be notified of this change--I strongly suspect not
because I don't think they even know/care who the "members" of the LLC
are. I actually called the IRS about this last tax season and they
said I should fax the revised articles of organization to them.
However, since I see no need to revise the articles of organization
(again, since no members are listed) I suspect that was incorrect
advice and that it will be easier and just as legitimate to just scrap
the old EIN and get a new one.



What the IRS told you to do is what you should do. It's how they fix it
internally.

You should see if they can change it by letting them know you made a mistake
on the SS-4 application. See what they say needs to be done to fix that
error.
 
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D

dan.cardinal

Thanks for the quick reply Paul. I just called them as you suggested
and when I explained that the mistake was the "Type of entity" they
said that cannot be changed for EINs and that I would have close out
the old one and apply for a new one.

Please do post if you think that's a bad idea and I'll call again to
make sure I get consistent direction (as I mentioned, when I called a
year ago they did mention faxing in proof of the change so they could
update it)...
 

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