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Correct CTR Completion for SMLLC

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We have to file a CTR for a cash deposit to an account of a single member LLC that uses its member's Social Security number instead of an EIN. Should we use the 2008 DBA ruling from FinCEN as a "go by" to complete the CTR?

In spite of the fact that the IRS uses the term "sole proprietorship" in its website discussion of the taxpayer identification number (TIN) to be used by a single member LLC (SMLLC), don't assume that the IRS discussion gives you license to treat the SMLLC as a sole proprietorship. An LLC is a separate legal entity. An SMLLC can, under current IRS rules, elect to be disregarded as an entity and use as its TIN the TIN of its single member, whether its a Social Security number or an Employer Identification number (EIN).

Unless FinCEN issues instructions to the contrary, you should treat the LLC as an entity. Do not try to play the system by listing the single member as the person on whose behalf the transaction was completed, as you would do for a sole proprietorship.

Assuming that the cash deposit you describe was made on behalf of an SMLLC by its single member, you should enter the name of the LLC in item 2 and complete the rest of Section A just as you would for a corporation, except that you will use the single member's SSN for item 6. Then complete Section B for the individual that made the deposit.

If the single member's last name appears as part of the LLC's name, the filing should pass the IRS's name/number match routine. If it does not appear as part of the LLC's name, it's likely you will receive a notice of mismatched name and number from the IRS, in which case you should annotate the correspondence to indicate that the number is correct based on the IRS's own rules, file the notice in your records and take no further action.

First published on 11/02/09

First published on 11/02/2009

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