Hello.
I changed my business structure from sole LLC to partnership LLC last year. My business agent told me that I don't have to do anything with the State but keep my internal record.
So I sent form 8832 to IRS in November but didn't receive the determination yet which possibly means IRS might not receive it (I didn't use certified mail).
And I filed tax return with this change: 1065 for partnership LLC (e-filed without 8832) and included Schedule K for personal filing.
I just learned all this went wrong. How can I fix this situation?
What happened? You still have the default classification despite the fact that you changed the number of members.
A new eligible entity should not file Form 8832 if it will be using its default classification (see Default Rules below).
.....an eligible entity classified as a partnership will become a disregarded entity when the entity’s membership is reduced to one member and a disregarded entity will be classified as a partnership when the entity has more than one member.
What happened? You still have the default classification despite the fact that you changed the number of members.
A new eligible entity should not file Form 8832 if it will be using its default classification (see Default Rules below).
.....an eligible entity classified as a partnership will become a disregarded entity when the entity’s membership is reduced to one member and a disregarded entity will be classified as a partnership when the entity has more than one member.
Care should be exercised to ensure that the
IRS receives the election. If the entity is not
notified of acceptance or nonacceptance of
its election within 60 days of the date of filing,
take follow-up action by calling
1-800-829-0115, or by sending a letter to the
service center to inquire about its status.
Send any such letter by certified or registered
mail via the U.S. Postal Service, or equivalent
by the way, did you get an EIN for the partnership?
type of delivery by a designated private
delivery service (see Notice 2004-83, 2004-52
I.R.B. 1030 (or its successor)).
@Mike9241 wrote:
Care should be exercised to ensure that the IRS receives the election
I am not at all sure why one would need to make an election for a default classification.
Thank you. I'll reach out to the IRS to ask about the status.
I received EIN when I first filed my LLC and as far as I understand it doesn't need to be changed even if the business structure has changed to partnership LLC.