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We recently formed a single-member LLC (Texas) that is a disregarded

entity-sole proprietorship. Former sole...
We recently formed a single-member LLC (Texas) that is a disregarded entity-sole proprietorship. Former sole proprietorship had its own EIN for payroll purposes. I am trying to find out if we can use the same EIN number for the new LLC. In searching IRS website about this, I find conflicting information. Can you help me clarify? I would be happy to cut and paste (from the IRS website) the conflicting information.
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7/14/2013
Tax.appeal.168
Tax.appeal.168, Tax Accountant
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Welcome. THANK YOU for choosing Just Answer. My name is XXXXX XXXXX my goal is to help make YOUR life, a little...LESS taxing.

In brief, if the business structure did not change, you will not need a new E.I.N. SEE BELOW;

You will be required to obtain a new EIN if any of the following statements are true.
  • child">
    A new LLC with more than one owner (Multi-member LLC) is formed under state law.
  • A new LLC with one owner (Single Member LLC) is formed under state law and chooses to be taxed as a corporation or an S corporation.
  • A new LLC with one owner (Single Member LLC) is formed under state law, and has an excise tax filing requirement for tax periods beginning on or after January 1, 2008 or an employment tax filing requirement for wages paid on or after January 1, 2009.

You will not be required to obtain a new EIN if any of the following statements are true.

  • You report income tax as a branch or division of a corporation or other entity, and the LLC has no employees or excise tax liability.
  • An existing partnership converts to an LLC classified as a partnership.
  • The LLC name or location changes.
  • An LLC that already has an EIN chooses to be taxed as a corporation or as an S corporation.
  • A new LLC with one owner (single member LLC) is formed under state law, does not choose to be taxed as a corporation or S corporation, and has no employees or excise tax liability. NOTE: You may request an EIN for banking or state tax purposes, but an EIN is not required for federal tax purposes.

REFERENCE SOURCE:

 

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Do-You-Need-a-New-EIN%3F

 

------------------------------------------------

 

Is the new LLC a multi-member LLC (partnership)? If so, you do need to apply for a new E.I.N.

 

Please let me know if I can be of further assistance to you regarding this matter.

 

Thank you again for using JUST ANSWER.

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Customer reply replied 4 years ago

This is what I find closely related to our situation from your notes above:


 


A new LLC with one owner (single member LLC) is formed under state law, does not choose to be taxed as a corporation or S corporation, and has no employees or excise tax liability. NOTE: You may request an EIN for banking or state tax purposes, but an EIN is not required for federal tax purposes.



We will NOT be a corporation or S corporation. However, the one employee will transfer from old sole proprietorship to new LLC. Does that mean we will need a new EIN?



I will add a bonus amount to your fee here. Can I upload more notes for you? See below



NOTES FROM IRS PUBLICATION #3402



REGARDING DISREGARDED ENTITY: Sole Proprietorship Changing to Single-Member LLC



Taxpayer identification number. For all income tax purposes, a single-member LLC classified as a disregarded entity must use the owner's social security number (SSN) or EIN. This includes all information returns and reporting related to income tax. For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number and Certification, the LLC must provide the owner's SSN or EIN, not the LLC's EIN.


Note fromCustomer We have this EIN number already (several years now): We have been using this for everything: W-9s and also for Employment Tax Purposes.


 


<span style="text-decoration: underline;"Customersays: More notes/clarification from IRS Publication 3402:


However, most new single-member LLCs classified as a disregarded entity will need to obtain an EIN for the LLC. An LLC will need an EIN if it has any employees [We will have one employee for now on payroll.] or if it will be required to file any of the excise tax forms listed above (see Employment tax and certain excise taxes earlier). See Form SS-4, Application for Employer Identification Number, for information on applying for an EIN.


 


QUESTIONS:


1. Will we have to issue separate W-2s to same employee on old Sole Proprietorship that transferred to new LLC?


 


THEN AFTER SEARCHING MORE ON THE IRS WEBSITE TO FILE A NEW EIN, I FOUND SOMETHING BELOW THAT CONFLICTS WITH THE INFO IN PUBLICATION 3402 ABOVE:



Limited Liability Companies



You will not be required to obtain a new EIN if the following statements are true:



  • A corporation files papers with the state to convert to an LLC and will elect via Form 8832 to be taxed as a corporation.

  • The number of members in the LLC changes from more than one member to a single member.

  • The number of members in the LLC changes from a single member to more than one member.

  • A sole proprietor files papers to become a state recognized entity, organizes as an LLC, and will file Form 8832 or Form 2553 to elect to be treated as a disregarded entity or taxed as a corporation or small business corporation.


Would the BOLD info apply to our situation in which case we would NOT need a new EIN? Rather we should fill out Form 8832 and send in?


Hello again Lynn,


Q1: We will NOT be a corporation or S corporation. However, the one employee will transfer from old sole proprietorship to new LLC. Does that mean we will need a new EIN?

Q1a: A sole proprietor files papers to become a state recognized entity, organizes as an LLC, and will file Form 8832 or Form 2553 to elect to be treated as a disregarded entity or taxed as a corporation or small business corporation.

A1 and A1a: Even though you are not technically incorporating, If completing the Form 8832, the LLC is electing to be taxed as a corporation, therefore a new E.I.N. will be needed. SEE BELOW:

------------------------------------------------


You will be required to obtain a new EIN if any of the following statements are true.

  • A new LLC with more than one owner (Multi-member LLC) is formed under state law.
  • A new LLC with one owner (Single Member LLC) is formed under state law and chooses to be taxed as a corporation or an S corporation.*
  • A new LLC with one owner (Single Member LLC) is formed under state law, and has an excise tax filing requirement for tax periods beginning on or after January 1, 2008 or an employment tax filing requirement for wages paid on or after January 1, 2009.

* Completing the Form 8832 --you're electing to be taxed as a corporation.

 

---------------------------------------------------------


Sole Proprietors

You will be required to obtain a new EIN if any of the following statements are true.

  • You are subject to a bankruptcy proceeding.
  • You incorporate.
  • You take in partners and operate as a partnership.
  • You purchase or inherit an existing business that you operate as a sole proprietorship.

You will not be required to obtain a new EIN if any of the following statements are true.

  • You change the name of your business.
  • You change your location and/or add other locations.
  • You operate multiple businesses.

------------------------------------------

 

Q: Will we have to issue separate W-2s to same employee on old Sole Proprietorship that transferred to new LLC?

 

A: If it is applicable for you to get a new E.I.N., then the answer to this question is yes because for federal and state tax purposes for the employer, the correct E.I.N. will need to be reflected on the W2. Example, when a company has an employee or employees, that company is required to employment taxes, usually quarterly, For this purpose the W2 needs to reflect the correct E.I.N.

 

Let me know if this clarifies matters for you.

Tax.appeal.168
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Lynn,

Thank you for the positive rating and generous bonus. I do appreciate it. Even if prompted to do so, there is no need to respond to this post. Feel free tocheck back with me in the future if you have other tax related questions. Enjoy the day.
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