Accountants/Attorneys of ATOT... two questions?

[manlymatt83]

I am doing some restructuring of my life, and leaving/consolidating some businesses. I've checked things out with the IRS and my accountant and have gotten different answers from different people, so I was hoping some ATOTers might have some answers.

Company #1

1. I originally formed this as a single member LLC back in 2011 taxed a sole proprietor. But my company name is the first thing listed on the EIN request form.
2. In 2016, I filed form 2553 to elect to be taxed as an S-CORP, and have been filing form 1120S since.
3. I now want to bring in a partner - he is going to buy a percentage of the business from me. Do I need a new EIN as it's now a multi-member LLC? Some have said yes, since I was originally a sole proprietor, some (including my call to the IRS, though she seemed confused) say no because I have been filing form 1120S and so the fact that I was originally a sole proprietor doesn't matter much anymore.

Company #2

1. I am 20% owner, the other owner is 80% owner. I am resigning my shares and handing them back to him - company hasn't really gone anywhere but he wants to continue.
2. We did an internal buyout agreement, he now owns 100%.
3. Since we are a multi-member LLC taxed as a partnership, and now it will be a single-member LLC taxed as a sole proprietor, does he need a new EIN? I believe he does, but when I called the IRS, they said "it really doesn't matter... if he files as the only owner we'll record that on our end". I thought partnerships have to be treated super carefully as there's no "president"? Is it different because it's an LLC taxed as a partnership?
4. He is going to get a new bank account and credit card once he gets his new EIN (if he needs one) and I will close the existing accounts. Is there anything else I need to think about doing?

Really appreciate anyone's advice who knows about this stuff or has been in this situation before... a lot of the reason I'm making this post is because of inconsistent answers I've been getting.

 

[[DHT]Osiris]

IANAL, but I wouldn't suggest you get your tiebreaker legal advise from an internet forum.

 

[Scarpozzi]

[DHT]Osiris is right. I know nothing about this stuff, but a quick Google search told me this:

Company #1:
I found this website below...it suggests you have to file an 8832 BEFORE you can file a 2553 and that you're locked as an SCORP tax structure for 5 years when doing so:

When to switch from LLC to S Corp • Online Taxman

Switching from LLC to S corp can have significant tax and retirement benefits. Learn here when is the right time to convert your LLC into an S corporation.

onlinetaxman.com

.

That's the tax structure and how you are essentially receiving compensation from the business, but continuing down the page, it suggest the "actual entity structure" would need to be formally changed in the the state it was founded. So....to answer your question, I would follow up with the STATE office that your LLC was founded and ask them what needs to be done if you're just an LLC with S-Corp tax structure. Your tax structure sounds like it will have to remain as a corporation though until 5 years from when it was changed.

Company #2
I'm feeling lazy now...read up:

When to get a new EIN | Internal Revenue Service

Generally, businesses need a new Employer Identification Number (EIN) when their ownership or structure has changed. Determine if you need a new EIN.

www.irs.gov

 

[s0me0nesmind1]

Heh, gotta love our system....

Need all of the following:

1) Lawyer for legal advice
2) Accountant for... proper accounting of legal entity
3) Tax accountant/lawyer for how best to ensure you're reporting/taxed correctly