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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I have recently opened a Wyoming LLC (only one owner non-resident

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I have recently opened a Wyoming LLC (only one owner non-resident of the US). I know that I am not obliged to request for EIN (one owner, no employees and I am not selling products in the US).

However I have a problem in opening the account in US for my business and I am wondering whether it would be a good idea to apply for the EIN.

What consequences will arise for me if I had EIN? Any IRS reporting?
Submitted: 12 months ago.
Category: Tax
Expert:  Lev replied 12 months ago.

Lev :

Hi and welcome to Just Answer!
You are correct - banks would not open the account for you personally or for the LLC without having a tax ID.
The fact of having the tax ID would not trigger any additional tax liability of any additional filing requirements.

Lev :

A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations. Most states also permit “single-member” LLCs, those having only one owner.
Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”). Specifically, a domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and affirmatively elects to be treated as a corporation. And an LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes), unless it files Form 8832 and affirmatively elects to be treated as a corporation.
As a nonresident alien - you are taxed only on income from US sources.
If you start the LLC - the situation will not be different because a single member LLC is disregarded entity - means - it is ignored for income tax purposes - and all income and expenses are reported on owner's individual tax return as if there were not the LLC.
If you are a nonresident alien - you are taxed ONLY on income from US sources. Thus - if you do not have any income from US sources - there is no tax liability - and you are not required to file US federal tax return. Your tax liability in your home country or your country of residence - is a separate issue - and is based on local laws.
There are some complex rules to determine the source of income. You may take a look - page 12 of IRS publication 519 - http://www.irs.gov/pub/irs-pdf/p519.pdf - Table 2-1. Summary of Source Rules for Income of Nonresident Aliens.

Lev :

A single member LLC is disregarded entity - means - ignored - as it doesn't exist - and all business activities and transactions are treated as performed by the member as if there were no LLC.
So - in this case to determine if such income is taxable or not in the US - we need to start with who is the member and what type of income has been received.
As in your situation - the member would be a nonresident alien - and income is from sources outside the US - such income is not taxable in the US.

Customer:

So I should apply for the EIN and I do not have to submit any other forms to the IRS on annual basis?

Lev :

As long as your LLC will not have any income from US sources - that is correct - no need fro any tax filing.

Lev :

Filing requirements for income tax purposes are based on income - as long as there is NO income from US sources - nothing need to be filed with the IRS. You still need to maintain your Wyoming LLC current with Wyoming state authorities.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22737
Experience: Taxes, Immigration, Labor Relations
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