Business & farm

This area is confusing for many:

• By default, a SMLLC is a disregarded entity.  As such, the IRS is indicating that it is not necessary to obtain an EIN and the owner should just use their SS#.
• Based on your facts, your sole proprietorship and SMLLC are the same for federal income tax reporting (and state since most if not all follow federal); both filed on Schedule C.
• If the SMLLC has employees, then the IRS requires a separate EIN for payroll reporting requirements.
• On your Schedule C, just report both your SS# and EIN if you have one.  This will avoid any potential matching issues.
• Many individuals get an EIN for their SMLLC to use when providing information to vendors.  In this day and age of ID theft, many prefer to provide the EIN instead of their SS#.
• You are correct in that the IRS indicates to use your SS# on the W-9, but many use their assigned EIN for the reason noted in bullet 4.
• I believe the IRS is concerned with a SMLLC obtaining an EIN, providing this EIN to a vendor and then not using the EIN when reporting their information on Schedule C; possibly in an attempt to avoid reporting income.  The IRS will eventually be able to match the EIN to the owner's SS# but this may take time and effort, notices, letter writing, collection efforts, etc.