"If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN... The IRS makes it very clear that I am to use my SSN, and not to use my EIN. The next part adds a lot of confusion ... (or EIN, if the owner has one) ... [by this previous text in the parenthese, the IRS means that if the disregarded LLC is owned by an LLC that is a corporation, and that corporation has an EIN, then use the corporations's EIN] Now, I suspect that a lot of people are now confused, so the IRS adds the the next sentence, and this sentence is repeating the first sentence of this paragraph. Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN."
It is the above instructions, that are terribly written, that cause a lot of problems. If I were to re-write it, I would say the following:
a) A single-member LLC that is also a disregarded entity can be owned by an individual, or owned by another LLC.
b) If the owner is an individual, then you must use the individuals SSN (even if the disregarded entity has an EIN, do not use it for IRS purposes)
c) If the owner is a Corporation, then use the corporations EIN.
d) If the owner is a different single-member LLC, and that LLC is also disregarded, then use the individual's SSN
======== The above covers the W9 ==================
Part 2: IRS Instructions on filling out a 1099. Please see
https://www.irs.gov/pub/irs-prior/i1099gi--2019.pdf. Section J. It states:
"For a single-member LLC (including a foreign LLC with a U.S. owner) that is disregarded as an entity separate from its owner under Regulations section 301.7701-3, enter the owner's name only on the first name line and the LLC's name on the second name line. For the TIN, enter the owner's SSN (or EIN, if applicable). If the LLC is taxed as a corporation, partnership, etc., enter the entity's EIN." The EIN is only applicable if the owner is a corporation that has an EIN. In my case, I am a disregarded-enetity, so the IRS wants the 1099 in with my SSN, not the EIN.
============ The addresses the 2 key IRS instructional documents for disregarded entities ====
More helpful information:
1) Rental Income = I only use Schedule E. I do not file a schedule C. However, the 1099-MISC are using my LLC's EINs, even though they are disregarded entities. I think this is wrong given the above instructions.
2) Vanguard, who provides me with tax planning services at no charge, helped me set up my EINs and W9s for my LLCs. The 1099-DIV and 1099-B that I receive from vanguard uses the EIN. I think this is wrong.
3) Its been 3 years since I have created these LLCs, and I have a large stack of 1099s. I am worried that all of?
them need to be corrected. Some of the 1099s are from companies that went out of business. what do I do?
4) My IRS tax transcripts do not list the wage and income for anything that uses the LLC's EIN. If my SSN was linked to my EIN, wouldn't it be with my SSN's tax transcripts?
Thank you.
