Filed a 1099 misc to a business, formatted EIN as an SSN

[Mitch]

Filed a 1099 misc to a business, formatted EIN as an SSN

Example: EIN is formatted like xxx-xx-xxxx instead of xx-xxxxxxx

I did a TIN match and it was accepted.

Will I have to do a type 2 correction or get an IRS Notice?

Does the IRS disregard the dashes?

Thank you

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

[Adam H. Kerman]

Mitch <one.jaw...@gmail.com> wrote:

>Filed a 1099 misc to a business, formatted EIN as an SSN

>Example: EIN is formatted like xxx-xx-xxxx instead of xx-xxxxxxx

>I did a TIN match and it was accepted.

Where did you find the big list of EINs to match?

>Will I have to do a type 2 correction or get an IRS Notice?

>Does the IRS disregard the dashes?

[John Levine]

According to Adam H. Kerman <a...@chinet.com>:

>Mitch <one.jaw...@gmail.com> wrote:
>
>>Filed a 1099 misc to a business, formatted EIN as an SSN
>
>>Example: EIN is formatted like xxx-xx-xxxx instead of xx-xxxxxxx
>
>>I did a TIN match and it was accepted.
>
>Where did you find the big list of EINs to match?

The IRS has a TIN matching service.

https://www.irs.gov/tax-professionals/taxpayer-identification-number-tin-matching

I've used it because I have an EIN for a sole proprietorship and
people kept kicking back my 1099s because the match failed. I still
don't understand when I'm supposed to use the EIN vs my SSN.

As a bonus confusion, I also have a single member LLC with its own EIN
because it used to be a two-member LLC, but they seem OK with that.

https://www.irs.gov/tax-professionals/taxpayer-identification-number-tin-matching

>>Will I have to do a type 2 correction or get an IRS Notice?
>
>>Does the IRS disregard the dashes?

I wouldn't worry about it.
--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[Adam H. Kerman]

John Levine <jo...@taugh.com> wrote:
>According to Adam H. Kerman <a...@chinet.com>:
>>Mitch <one.jaw...@gmail.com> wrote:

>>>Filed a 1099 misc to a business, formatted EIN as an SSN

>>>Example: EIN is formatted like xxx-xx-xxxx instead of xx-xxxxxxx

>>>I did a TIN match and it was accepted.

>>Where did you find the big list of EINs to match?

>The IRS has a TIN matching service.

>https://www.irs.gov/tax-professionals/taxpayer-identification-number-tin-matching

Thanks. I was trying to search for that on the IRS Web site the other
day but didn't spot it.

>. . .

[Mitch]

On Saturday, January 27, 2024 at 6:20:20 PM UTC-6, John Levine wrote:
> According to Adam H. Kerman <a...@chinet.com>:
> >Mitch <one.jaw...@gmail.com> wrote:
> >
> >>Filed a 1099 misc to a business, formatted EIN as an SSN
> >
> >>Example: EIN is formatted like xxx-xx-xxxx instead of xx-xxxxxxx
> >
> >>I did a TIN match and it was accepted.
> >
> >Where did you find the big list of EINs to match?
> The IRS has a TIN matching service.
>
> https://www.irs.gov/tax-professionals/taxpayer-identification-number-tin-matching
>
> I've used it because I have an EIN for a sole proprietorship and
> people kept kicking back my 1099s because the match failed. I still
> don't understand when I'm supposed to use the EIN vs my SSN.
>
> As a bonus confusion, I also have a single member LLC with its own EIN
> because it used to be a two-member LLC, but they seem OK with that.
>
> https://www.irs.gov/tax-professionals/taxpayer-identification-number-tin-matching
> >>Will I have to do a type 2 correction or get an IRS Notice?
> >
> >>Does the IRS disregard the dashes?
> I wouldn't worry about it.
> --
> Regards,
> John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
> Please consider the environment before reading this e-mail. https://jl.ly

Thank you for your reply! That makes me feel a bit better

[Stuart O. Bronstein]

"John Levine" <jo...@taugh.com> wrote:
> According to Adam H. Kerman <a...@chinet.com>:
>>Mitch <one.jaw...@gmail.com> wrote:
>>
>>>Filed a 1099 misc to a business, formatted EIN as an SSN
>>
>>>Example: EIN is formatted like xxx-xx-xxxx instead of xx-xxxxxxx
>>
>>>I did a TIN match and it was accepted.
>>
>>Where did you find the big list of EINs to match?
>
> The IRS has a TIN matching service.
>
> https://www.irs.gov/tax-professionals/taxpayer-identification-number-ti
> n-matching
>
> I've used it because I have an EIN for a sole proprietorship and
> people kept kicking back my 1099s because the match failed. I still
> don't understand when I'm supposed to use the EIN vs my SSN.

The rules as you know them are probably correct. Technically you should
use your SS# for W-2 employment, and your EIN for everything else (though
the IRS prefers you not use an EIN as a sole proprietor, they accept that
it's permissible). I do the same thing - use an EIN for my sole
proprietorship. But I haven't had any problems with it - at least not
that anyone has told me about.

> As a bonus confusion, I also have a single member LLC with its own EIN
> because it used to be a two-member LLC, but they seem OK with that.

Technically when you go from being taxed as a partnership to a
proprietorship, you should use your SS# or get a new EIN. Do you still
file Form 1065?

> https://www.irs.gov/tax-professionals/taxpayer-identification-number-ti

> n-matching
>
>>>Will I have to do a type 2 correction or get an IRS Notice?
>>
>>>Does the IRS disregard the dashes?
>
> I wouldn't worry about it.


--

Stu
http://DownToEarthLawyer.com

[John Levine]

According to Stuart O. Bronstein <spam...@lexregia.com>:

>The rules as you know them are probably correct. Technically you should
>use your SS# for W-2 employment, and your EIN for everything else (though
>the IRS prefers you not use an EIN as a sole proprietor, they accept that
>it's permissible). I do the same thing - use an EIN for my sole
>proprietorship. But I haven't had any problems with it - at least not
>that anyone has told me about.

The TIN match recognized my name but not the name of my business which
is a pain. It looks like I can write to the IRS and tell them the
business name that goes with the EIN. Has anyone done that?

>> As a bonus confusion, I also have a single member LLC with its own EIN
>> because it used to be a two-member LLC, but they seem OK with that.
>
>Technically when you go from being taxed as a partnership to a
>proprietorship, you should use your SS# or get a new EIN. Do you still
>file Form 1065?

No more 1065s, it's now a disregarded entity. I looked and found
advice on the IRS web site that says that since it's the same LLC, it
keeps the same EIN. It switched from partnership to disregarded a
decade ago and the IRS hasn't objected.

--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[Stuart O. Bronstein]

"John Levine" <jo...@taugh.com> wrote in
news:up4hvn$2k77$1...@gal.iecc.com:

> According to Stuart O. Bronstein <spam...@lexregia.com>:
>>The rules as you know them are probably correct. Technically you
>>should use your SS# for W-2 employment, and your EIN for everything
>>else (though the IRS prefers you not use an EIN as a sole proprietor,
>>they accept that it's permissible). I do the same thing - use an EIN
>>for my sole proprietorship. But I haven't had any problems with it -
>>at least not that anyone has told me about.
>
> The TIN match recognized my name but not the name of my business which
> is a pain. It looks like I can write to the IRS and tell them the
> business name that goes with the EIN. Has anyone done that?
>
>>> As a bonus confusion, I also have a single member LLC with its own
>>> EIN because it used to be a two-member LLC, but they seem OK with
>>> that.
>>
>>Technically when you go from being taxed as a partnership to a
>>proprietorship, you should use your SS# or get a new EIN. Do you
>>still file Form 1065?
>
> No more 1065s, it's now a disregarded entity. I looked and found
> advice on the IRS web site that says that since it's the same LLC, it
> keeps the same EIN. It switched from partnership to disregarded a
> decade ago and the IRS hasn't objected.

This is the page that I found saying the opposite. But if they haven't
given you any problem, there's no reason to change it now:

https://www.irs.gov/businesses/small-businesses-self-employed/do-you-
need-a-new-ein


--
Stu
http://DownToEarthLawyer.com

[John Levine]

According to Stuart O. Bronstein <spam...@lexregia.com>:

>> No more 1065s, it's now a disregarded entity. I looked and found
>> advice on the IRS web site that says that since it's the same LLC, it
>> keeps the same EIN. It switched from partnership to disregarded a
>> decade ago and the IRS hasn't objected.
>
>This is the page that I found saying the opposite. But if they haven't
>given you any problem, there's no reason to change it now:
>
>https://www.irs.gov/businesses/small-businesses-self-employed/do-you-
>need-a-new-ein

When I look at at that page, there are lists of when you will have to
get a new EIN and when you won't have to get a new EIN. While turning
a single-member LLC into a partnership is in the new EIN list, the
converse isn't.

Poking around on the intertubes, this page says keep the same EIN:

https://smallbusiness.chron.com/going-multi-member-llc-single-member-llc-33047.html

This page says you need a new EIN, but it links to the same page you
found that doesn't say that:

https://ttlc.intuit.com/community/business-taxes/discussion/multiple-member-llc-to-single-member-llc/00/1007654

--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[Stuart O. Bronstein]

"John Levine" <jo...@taugh.com> wrote:
> According to Stuart O. Bronstein <spam...@lexregia.com>:

>>> No more 1065s, it's now a disregarded entity. I looked and found
>>> advice on the IRS web site that says that since it's the same LLC,
>>> it keeps the same EIN. It switched from partnership to disregarded
>>> a decade ago and the IRS hasn't objected.
>>
>>This is the page that I found saying the opposite. But if they
>>haven't given you any problem, there's no reason to change it now:
>>
>>https://www.irs.gov/businesses/small-businesses-self-employed/do-you-
>>need-a-new-ein
>
> When I look at at that page, there are lists of when you will have to
> get a new EIN and when you won't have to get a new EIN. While turning
> a single-member LLC into a partnership is in the new EIN list, the
> converse isn't.

It says,

"Partnerships

"You will be required to obtain a new EIN if any of the following
statements are true.

"• You incorporate.

"• Your partnership is taken over by one of the partners and is operated
as a sole proprietorship.

"• You end an old partnership and begin a new one."

Since the IRS ignores the existence of LLCs for most purposes, your LLC
taxed as a partnership was taken over by one of the partners and operated
as a sole proprietorship. That is exactly when it says a new EIN is
required.

On the other hand if they didn't notice and you use the same EIM without
trouble, don't stop now. It might confuse them.

> Poking around on the intertubes, this page says keep the same EIN:
>
> https://smallbusiness.chron.com/going-multi-member-llc-single-member-ll
> c-33047.html
>
> This page says you need a new EIN, but it links to the same page you
> found that doesn't say that:
>
> https://ttlc.intuit.com/community/business-taxes/discussion/multiple-me
> mber-llc-to-single-member-llc/00/1007654


--

Stu
http://DownToEarthLawyer.com

[Adam H. Kerman]

John Levine <jo...@taugh.com> wrote:
>According to Stuart O. Bronstein <spam...@lexregia.com>:

>>>No more 1065s, it's now a disregarded entity. I looked and found
>>>advice on the IRS web site that says that since it's the same LLC, it
>>>keeps the same EIN. It switched from partnership to disregarded a
>>>decade ago and the IRS hasn't objected.

>>This is the page that I found saying the opposite. But if they haven't
>>given you any problem, there's no reason to change it now:

>>https://www.irs.gov/businesses/small-businesses-self-employed/do-you-
>>need-a-new-ein

>When I look at at that page, there are lists of when you will have to
>get a new EIN and when you won't have to get a new EIN. While turning
>a single-member LLC into a partnership is in the new EIN list, the
>converse isn't.

>Poking around on the intertubes, this page says keep the same EIN:

>https://smallbusiness.chron.com/going-multi-member-llc-single-member-llc-33047.html

>This page says you need a new EIN, but it links to the same page you
>found that doesn't say that:

>https://ttlc.intuit.com/community/business-taxes/discussion/multiple-member-llc-to-single-member-llc/00/1007654

I've read through all this and I don't agree with Mr. Bronstein. Mr.
Levine's LLC was taxed as a multi-member partnership. The other partners
left so it's a single-member LLC, owned by Mr. Levine and now a
disregarded entity treated as a sole proprietor. If there were no EIN
previously and there was no payroll, then an EIN wouldn't even be
required. As he's long had an EIN, he might as well continue to use it.

Why is he getting informed of no match? My guess is that it's the same
thing as we've discussed elsewhere in this thread, that the 9-digit
number is not being matched to EINs but SSNs.

If Mr. Levine still retained his EIN assignment letter from decades ago,
then he should provide a copy of it to any payor required to report a
payment on a 1099 so they are given the clue that it's an EIN and not an
SSN. If not, give the payor a W-9, which has separate fields for the
number, whether it's an SSN or EIN.

If their information return preparation software still will not accept
his EIN as the TIN to use for reporting, then they'll have to issue his
1099 on paper.

He can cooperate, but truly, that the payor is using software that
just doesn't meet his needs is not Mr. Levine's problem.

[John Levine]

According to Stuart O. Bronstein <spam...@lexregia.com>:

>"• Your partnership is taken over by one of the partners and is operated
>as a sole proprietorship.

Huh, you're right. It's been quite a while since I bought out the other
member, guess the rules have changed.

As you say, I'm certainly not going to change the EIN now. It'd just confuse them.

--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[Adam H. Kerman]

Stuart O. Bronstein <spam...@lexregia.com> wrote:

No. There is no new entity. It's still organized and operated as the
same LLC. Even though the nature of the LLC changed -- one member
remains after the other members withdrew, IRS does not see a new sole
proprietor. Because the number of its members changed, the existing entity
has a new classification for tax purposes, formerly a partnership, now
a disregarded entity to be treated as a sole proprietor.

>On the other hand if they didn't notice and you use the same EIM without
>trouble, don't stop now. It might confuse them.

>>Poking around on the intertubes, this page says keep the same EIN:

>>https://smallbusiness.chron.com/going-multi-member-llc-single-member-llc-33047.html

>>This page says you need a new EIN, but it links to the same page you
>>found that doesn't say that:

>>https://ttlc.intuit.com/community/business-taxes/discussion/multiple-member-llc-to-single-member-llc/00/1007654

[Stuart O. Bronstein]

"Adam H. Kerman" <a...@chinet.com> wrote in
news:up77a7$ahvm$1...@dont-email.me:

You misunderstand how the IRS treats LLCs. As fas as the IRS is
concerned (except when it comes to employment taxes) they don't exist.
When an LLC gets an EIN, it's really not the LLC that gets it, but the
partnership or the proprietor who gets it, not really the LLC - because
they don't exist for IRS purposes.

>>On the other hand if they didn't notice and you use the same EIM
>>without trouble, don't stop now. It might confuse them.
>
>>>Poking around on the intertubes, this page says keep the same EIN:
>
>>>https://smallbusiness.chron.com/going-multi-member-llc-single-member-l
>>>lc-33047.html
>
>>>This page says you need a new EIN, but it links to the same page you
>>>found that doesn't say that:
>

>>>https://ttlc.intuit.com/community/business-taxes/discussion/multiple-m
>>>ember-llc-to-single-member-llc/00/1007654
>



--
Stu
http://DownToEarthLawyer.com

[Adam H. Kerman]

Stuart O. Bronstein <spam...@lexregia.com> wrote:

"Treats", yes, as in classification for tax treatment. The LLC, organized
under state law, is still a business entity for federal tax law.

I just read through the instructions for the SS-4. Lines 8a-8c are used
to provide information about the LLC, which is then described in 9a. The
instructions note specifically that Line 9a is not an election for tax
classification. If the default classification is accepted, then Form
8832 isn't filed. The form's instructions don't discuss whether IRS
regards the LLC now changed to single member as a new entity.

The closest the instructions come to your position is Line 10. Reason
for applying. There is a choice "Changed type of organization" such as
becoming a partnership, but it's significant that there is no discussion
of LLCs here.

However, Form 8832 is filed to change the classification. I also read
through the instructions. Changing to a single-member LLC and accepting
default classification as a disregarded entity isn't precisely an
election but this appears to be the easiest way to notify IRS.

Nothing in Form 8832's instructions say not to use this form for this
purpose, or to file a new SS-4 to obtain a new EIN instead.

Similar to your position, LLCs are discussed in Publication 1635
Understanding Your EIN, but there is no discussion about whether
changing from multi member to single member is treated as a new entity.
There is a comment that the individual with multiple sole proprietor
businesses may use one EIN for any or all of them. In the partnership
discussion, there is discussion that there is a new entity if one
partner takes over and operates it as a sole proprietorship. There is no
discussion here about changing from a multi member to single member LLC.

Given the absense of clear instructions specific to whether IRS regards
the change from multi member to single member LLC as a new entity, I'm
going to assume it does not.

As long as the entity has informed IRS on Form 8832 of the change to
single member and that it's classification is now disregarded entity, I
don't see why IRS would consider it to be a new entity. It's reporting
multi member or single member LLC on the 8832 and the classification
election that's controlling, not the EIN itself.

If it weren't, and the classification change required the issuance of a
new EIN, then there'd be no need for the 8832. The election could be
made directly on the SS-4.

>>>. . .

[Adam H. Kerman]

Stuart O. Bronstein <spam...@lexregia.com> wrote:

>>. . .

>You misunderstand how the IRS treats LLCs. As fas as the IRS is
>concerned (except when it comes to employment taxes) they don't exist.
>When an LLC gets an EIN, it's really not the LLC that gets it, but the
>partnership or the proprietor who gets it, not really the LLC - because
>they don't exist for IRS purposes.

In my other followup, pending approval, I believe I'm wrong. Form 8832 is
not required because, with the change from multi member to single member,
the LLC is not making an election that's different from the default
classification. 8832 is required only if the LLC elected to be treated
like a corporation in leiu of partnership or disregarded, or elected to
end treatment as a corporation.

I read the regulations.

T.R. 301.7701-3(f)(2)

26 CFR Sec 301.7701-3 - Classification of certain business entities.

(f) Changes in number of members of an entity

(2) Partnerships and single member entities. An eligible entity
classified as a partnership becomes disregarded as an entity
separate from its owner when the entity's membership is reduced to
one member. A single member entity disregarded as an entity separate
from its owner is classified as a partnership when the entity has
more than one member. If an elective classification change under
paragraph (c) of this section is effective at the same time as a
membership change described in this paragraph (f)(2), the deemed
transactions in paragraph (g) of this section resulting from the
elective change preempt the transactions that would result from the
change in membership.

The entire paragraph refers to the classification of the entity from
partnership to disregarded upon becoming a single member entity. From
single member to multi member, it was classified as disregarded and
becomes classified as a partnership.

The classification changes. The change from single member to multi
member, or the reverse, does not make it a new entity.

[John Levine]

It appears that Adam H. Kerman <a...@chinet.com> said:
>I've read through all this and I don't agree with Mr. Bronstein. Mr.
>Levine's LLC was taxed as a multi-member partnership. The other partners
>left so it's a single-member LLC, owned by Mr. Levine and now a
>disregarded entity treated as a sole proprietor. If there were no EIN
>previously and there was no payroll, then an EIN wouldn't even be
>required. As he's long had an EIN, he might as well continue to use it.

All partnerships have to have EINs. And like he said, as far as the
IRS is concerned, LLCs do not exist. I think there used to be a
special case for a partnership that is an LLC turning into a
proprietorship that is an LLC, and I'm grandfathered.

>Why is he getting informed of no match?

You're confusing two threads. The EIN for the LLC is fine.

I have a separate older sole proprietorship with a different EIN. For
that EIN, the TIN matches on my name but not the name of the business,
which is a pain in the neck.

Now that I look at a blank W-9, it looks like I need to put my name on
line 1 and the business name on line 2 and that might make them happy
with the EIN.

--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[Stuart O. Bronstein]

"Adam H. Kerman" <a...@chinet.com> wrote in
news:up7pb7$d0sq$1...@dont-email.me:

Here's what the IRS says:

"An LLC is an entity created by state statute. The IRS did not create a
new tax classification for the LLC when it was created by the states;
instead IRS uses the tax entity classifications it has always had for
business taxpayers: corporation, partnership, or disregarded as an entity
separate from its owner, referred to as a “disregarded entity.” An LLC is
always classified by the IRS as one of these types of taxable entities.
If a “disregarded entity” is owned by an individual, it is treated as a
sole proprietor. If the “disregarded entity” is owned by any other
entity, it is treated as a branch or division of its owner."

https://www.irs.gov/businesses/small-businesses-self-employed/do-you-
need-a-new-ein

When an LLC taxed as a partnership is taken over by one of its
partners/members, it's no longer taxed as a partnership. That same pages
says that when a partnership is taken over by one of its partners, it
cannot use the same EIN, but either needs a new EIN or can use the Social
Security Number of the one remaining member.

Yes, the IRS recognizes that LLCs exist. But for most tax purposes they
are treated as if they don't.


--
Stu
http://DownToEarthLawyer.com

[Adam H. Kerman]

John Levine <jo...@taugh.com> wrote:

>>. . .

>You're confusing two threads. The EIN for the LLC is fine.

Sorry about that.

>. . .

[Adam H. Kerman]

I pointed out very similar language supporting your position, quoted above,
in the instructions for completing the SS-4 Application for EIN Line 10.
Nevertheless, that the classification change of an LLC is not explicitly
stated as a reason for IRS to treat the same LLC as a new entity should
lead to the logical conclusion that if IRS were treating it as a new
entity, it would have so stated.

The classification of an entity can be changed without IRS treating said
change as subsequent treatment as a new entity, hence the 8832. There
are no instructions on the 8832 that a classification change, whether
default tax treatment or elective tax treatment, also requires treating
it as a new entity after classification change.

>When an LLC taxed as a partnership is taken over by one of its
>partners/members, it's no longer taxed as a partnership. That same pages
>says that when a partnership is taken over by one of its partners, it
>cannot use the same EIN, but either needs a new EIN or can use the Social
>Security Number of the one remaining member.

This is a classification change, not IRS treating the old entity as a
new entity after the classification change. These are two different
concepts in tax law.

>Yes, the IRS recognizes that LLCs exist. But for most tax purposes they
>are treated as if they don't.

But that's classification.

Let's say an elective classification is made, say, taxing a multi member
LLC as a corporation (and then making the separate election to be an S
corp) and not as a partnership. This election can be revoked
subsequently if enough time has passed. IRS isn't recognizing that there
is a new entity with each election or revoking of election.

I'm sorry but in the absense of explicit instructions with regard to
LLCs, which are not found in the regulations either (quoted in my other
followup), I don't believe there is support for your position that
change in classification of an LLC means that IRS is treating it as a
brand new entity.