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Hi, I need to know if a WY domestic SMLLC (Single-Member…

Hi, I need to know...

Hi,

I need to know if a WY domestic SMLLC (Single-Member LLC) owned by a foreign NRA who has no SSN nor ITIN is under the obligation to report via an EIN or the owner ITIN to the IRS although there is no business in action except the LLC operation costs and some online affiliate business that's exempt via reporting to the withholding party through a w-8ben ?!

I really wounder ? if it is necessary or I just visit the WY state website and fill the annual state report ? almost 50$

I deal with withholding parties like Google AdSense and Clickbank. I don't have a special product of mine, as a consultation LLC, but I have a website with users login capabilities that offers them the use of another Clickbank's product that's not mine and for free. A Free Online Investment Site, or so! The site uses what's already available by large American firms in the size of what I mentioned! So there is nothing new I offer except the ease of using what's already available in exchange of internet traffic! An old famous story!

THANKS!

AL BUNYAN!!

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Answered in 6 hours by:

9/14/2010

Tax Professional: jgordosea, Enrolled Agent replied 12 years ago

jgordosea, Enrolled Agent

Category: Tax

Satisfied Customers: 3,161

Experience: I've prepared all types of taxes since 1987.

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Greetings,

A single member LLC is a disregarded entity for income tax purposes, by default.

That means that the income and expenses are reported by the single member as if the LLC did not exist (unless an election has been made for the LLC to be taxed as a corporation).

If an election to be taxed as a corporation has been made then the corporation would have the usual corporate tax filing requirements and use the corporate EIN.

If no election has been made the single member will report (or not report) the income and expenses of the LLC, as appropriate for the member. Since you have already decided that the income earned does not have to be reported by the single member then there is no additional income tax return needed for the income from the LLC.

I hope this helps explain the requirement to report the single member LLC income.

Please ask if you need clarification.

Best wishes.

jgordosea, Enrolled Agent

Category: Tax

Satisfied Customers: 3,161

Experience: I've prepared all types of taxes since 1987.

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Customer reply replied 12 years ago

OK DEAR,

Suppose that I got the EIN ,applied for an ITIN strictly for banking purposes(passive income) as an NRA who is a US LLC owner, got the ITIN, too, with that w-7 exception, and finally used them both (EIN and ITIN) for opening a US bank account for the LLC, would I use that ITIN only for decorating w-8ben forms?! means no need for reporting?! because that's what I've been told, if there is nothing to report like in my case! Is that right?! I really like to know! Some told me that I have to file to get an ITIN and some said no you can get it that way with EIN and w-7 exception 1 since you're a US LLC owner?!

THANKS!!

Tax Professional: jgordosea, Enrolled Agent replied 12 years ago

Hello again,

You do need an ITIN for the W-8ben.

You must file Form W-7 , Application for Individual Taxpayer Identification Number, to apply for an ITIN, and show that you have a federal tax purpose for seeking the ITIN. Along with the completed Form W-7, you will submit identity documents, and either a federal tax return, or other documentation to show the federal tax purpose for which you need the ITIN.

The exception is for sending documentation other than a tax return with the W-7.

From your description it does appear you will be using the ITIN only for filing the w-8ben (and opening the bank account).

I hope this helps to clarify (or confirm ) for you.

jgordosea, Enrolled Agent

Category: Tax

Satisfied Customers: 3,161

Experience: I've prepared all types of taxes since 1987.

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