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Lev, Tax Advisor
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If an LLC is filing (late) as a partnership and one partner

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If an LLC is filing (late) as a partnership and one partner pays his personal taxes and the other doesn't can the IRS attach the operating accounts of the LLC?
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

Please clarify what you mean by attached. Also, in order to better assist you, I have a few questions;

1) Has the LLC elected to be taxed as a Corporation?

2) Has Schedule K1's been issued to the partners? I ask this because the Schedule K-1 is the form that a partner's income or loss is reported on from the LLC. If no Schedule K1's have been issued, the partner that pays his taxes will be doing so ill informed because he/she doesn't know what their income or loss is from the LLC for that particular year.
Customer: replied 5 years ago.

Reply to:

 

1) No. They are filing as a general partnership.

 

2) No. The returns are not quite complete because of missing detailed information, so

Schedules K-1 cannot be issued yet.

 

As far as "attached' I mean: Can there be a lien, a levy, or any kind of action by IRS against the operating accounts (this is an internet sales business) of the LLC that would disrupt the business, in order to satisfy the personal tax debt of one partner, thus stopping or interrupting the ongoing business?

Hi and welcome to Just Answer!
Legally - the IRS may levy the partnership's bank account and/or properties owned by the partnership, but generally, the IRS doesn't do that - unless they can demonstrate that the taxpayer/partner is just using that account as a shelter or for personal purposes.

Accordingly, as long as the partnership is otherwise operating in a proper manner and is conducting normal business, timely filing tax returns, etc - then it likely has no worries as far as the IRS levy is concerned.
However, the IRS can send a notice requesting garnishment of any distributions or other payments due to the partner in question, which should be enforced.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28082
Experience: Taxes, Immigration, Labor Relations
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