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What are Disregarded Entities and W-9s?

As stated by the IRS, the IRS treats a single-member Limited Liability Company (SMLLC) with activities reflected on its owner’s federal tax return as a “disregarded entity”. In regards to the Taxpayer Identification Number and use of it on the form W-9, the IRS states the following:

“For federal income tax purposes, a single-member LLC classified as a disregarded entity generally must use the owner’s social security number (SSN) or employer identification number (EIN) for all information returns and reporting related to income tax. For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN.”

If you are investing through a single-member LLC, make sure when completing the form W-9 you are carefully reading and following the form instructions.

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