LLC, Sole Proprietorship CTR question

Posted By: CompliKat

LLC, Sole Proprietorship CTR question - 12/04/12 04:27 PM

I have a customer (CTR required) with an account XYZ LLC. IRS documents state XYZ LLC Susie Q Sole Member.... naturally XYZ has an EIN. I am thinking that because Susie Q is the sole member that she is a sole proprietorship and her SSN should be used for the CTR. For some reason the LLC is throwing me off. I know this is basic, but I need reassurance or correction from sage peergroup here at BOL!
Posted By: rlcarey

Re: LLC, Sole Proprietorship CTR question - 12/04/12 04:29 PM

I am thinking that because Susie Q is the sole member that she is a sole proprietorship.

For tax reporting, the sole member LLC can be a disregarded entity. For CTR reporting, it is not.
Posted By: CompliKat

Re: LLC, Sole Proprietorship CTR question - 12/04/12 04:40 PM

Thank you rlcarey, so are you saying to treat the LLC as an entity and use the EIN on the CTR?
Posted By: John Burnett

Re: LLC, Sole Proprietorship CTR question - 12/04/12 04:53 PM

Yes. The LLC is not a sole proprietorship. The IRS's rules on tax treatment and assignment of TINs is irrelevant to the question of ownership of the account. It's owned by an entity, and you have to report it that way.

If the LLC were using an SSN as its TIN, you'd run into filing challenges. But using its EIN avoids those problems.
Posted By: CompliKat

Re: LLC, Sole Proprietorship CTR question - 12/04/12 05:21 PM

Ok thanks.