EIN needed for a single-member LLC?

[MJG CPA]

Does a single member LLC need to apply for an EIN if there will be no employees or other reason to have an EIN?

[JRS]

From the IRS: An entity is considered to be a sole proprietorship for Federal tax purposes if an individual operates his or her business through a domestic Limited Liability Company (LLC) owned solely by the individual and does not elect for that LLC to be taxed as a corporation using Form 8832 (PDF), Entity Classification Election. In such a case, the LLC is disregarded for Federal tax purposes. Generally, the disregarded LLC should not request its own EIN. However, the owner of a disregarded LLC may choose to have the disregarded LLC pay all employment taxes and file employment tax returns with respect to wages paid to employees performing services for the disregarded LLC using the disregarded LLC's own name and EIN.

This was brought up on the IRS phone forum today. The first IRS person said yes, then was overruled. This "used to be a requirement, but no more."

[MJG CPA]

Thanks, JRS!

[kcjenkins]

Although you may find that they have to have one in order to get their new business a bank account. Which they should always do. Many banks will not open an LLC bank account for an entity unless it has it's own EIN, which is one reason I always go ahead and apply for one. It can not hurt, takes only a minute or two to get online, and helps in reminding the client that this is a separate 'entity', and must be treated as such, even if it is reported on a Sch C. Never, ever, let them just continue to use their old bank account. The new entity should always start clean, with it's own seperate bank account.

[MJG CPA]

helps in reminding the client that this is a separate 'entity', and must be treated as such, even if it is reported on a Sch C. Never, ever, let them just continue to use their old bank account. The new entity should always start clean, with it's own seperate bank account.

Good point, KC.