@mark-makuch wrote:
...Keep in mind that same person organized the same way (but choosing to have her single member llc treated as an s corp for tax purposes) can so it's not simply logical, like I can't be both employee and employer, because that's plenty possible.
That is because the S corporation is not treated as a disregarded entity (as is a single-member LLC).
The S corporation is an entity separate and apart from its shareholders, even if there is only one shareholder. Therefore, the sole shareholder can be an employee of the S corporation (or an LLC treated as an S corporation for federal income tax purposes).
@mark-makuch wrote:
So where in 31.3401 does it specifically say a person can't be an employee of her single member llc?
Again, an individual cannot be both an employee (which is actually a legal term) and an employer of a sole proprietorship (or single-member LLC that is disregarded for federal income tax purposes).
If you cannot figure that out from the cited Reg, it is because you are using pretzel logic, which might get you somewhere in an academic (and totally useless) argument on the internet, but it will fall absolutely flat with the IRS.
