Ezel / IRS Rulings / 201012046

CCA 201012046: Single-member LLCs became liable entities for federal employment taxes

Number
201012046
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Definitions
Topics
Entity classification
Code sections
§ 7701
Ruling dated
February 22, 2010
Publicly released
March 26, 2010
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice discussed the federal employment tax treatment of a single-member limited liability company. It stated that, for wages paid on or after January 1, 2009, a single-member LLC that had not elected corporate treatment was no longer disregarded as separate from its owner for federal employment tax purposes. As a result, the single-member LLC was the liable entity. The memorandum also noted that the relevant branch had worked on the final regulations changing these rules.

Ruling snapshot

  • Question: Who is liable for federal employment taxes on wages paid by a single-member LLC that has not elected corporate treatment?
  • Outcome: Advice given
  • Key authorities: IRC § 7701

Full text (IRS public release)

ID: CCA_2010022211235141 Number: 201012046
Release Date: 3/26/2010
Office: -----------------------------
UILC: 7701.00-00

From: ---------------
Sent: Monday, February 22, 2010 11:23:53 AM
To: ---------------
Cc: --------------------
Subject: Single member LLCs

I read through this determination letter. ---------------------------------------------------------------------------------------
-------------------Starting with wages paid on or after 1/2009, a single member LLC (assuming it has not elected corporate treatment) is no longer disregarded as separate from its owners for federal employment tax purposes. This means the single member LLC is the liable entity. -----------------------------------------------
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I'm copying --------------------, the branch chief of the ----------------------------------------------------------. Her branch primarily works that issue for us and worked heavily on the final regulations that changed the rules

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