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Honorcode · ‎September 6, 2020

Thank you for your well thought reply. Let me offer the reasons why I am still confused, and to address your questions.

1) IRS W9 Instructions, Page 4, Part I: I copied it directly from the W9 in black italic font. The red font are my comments based on my understanding of the instructions. https://www.irs.gov/pub/irs-pdf/fw9.pdf

"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

I am not taxed as a corporation. I am taxed as an individual. For that reason, I also beleive that the 1099s need to use my SSN, and only my 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 IRS also states "if I am taxed as a corporation, then use the EIN". I am not taxed as a corporation.

============ The addresses the 2 key IRS instructional documents for disregarded entities ====

More helpful information:

1) I only use schedule E for the rental income. I do not use schedule C.

2) Vanguard helped me set up all of my EINs and W9s because I qualified for their help. The 1099-DIV and 1099-B that I receive from vanguard uses the EIN for the disregarded entities. I think this is wrong given the IRS instructions..

3) The IRS transcripts for my SSN does not show any of the income that was reported to my EINs. If the accounts were linked, wouldn't I see these statements under my SSN's tax transcripts?

4) If my 1099s are incorrect, how do I fix them? Note that a few of the filers are now out of business, there is no way to get the original filer to submit a correction.

Thank you

Thank you.