Ezel / IRS Rulings / 201117030

CCA 201117030: A disregarded LLC's property could not be levied for its sole member's tax debt

Number
201117030
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Interest of Taxpayer
Topics
Procedure, penalties, and administration
Code sections
§ 6331
Ruling dated
March 11, 2011
Publicly released
April 29, 2011
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 2011, 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 2011
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 confirmed that the IRS could not levy on property owned by a disregarded LLC to satisfy the tax liability of the LLC's sole member. The advice explained that the sole member had no ownership interest in the LLC's property under local law. Disregarding the LLC for federal tax purposes did not allow the IRS to disregard the entity for collection purposes.

Ruling snapshot

  • Question: Could the IRS levy a disregarded LLC's property to satisfy its sole member's tax liability?
  • Outcome: Advice given.
  • Key authorities: IRC § 6331; applicable local law.

Full text (IRS public release)

ID: CCA_2011031115521526 Number: 201117030
Release Date: 4/29/2011
Office: ----------------------------
UILC: 6331.17-00

From: -----------------
Sent: Friday, March 11, 2011 3:52:16 PM
To: ------------------
Cc:
Subject: FW: LLC wrongful levy case

----------this is to confirm your opinion that the Service can’t levy on the property of a disregarded LLC to satisfy the tax liability of the LLC’s sole member. As you’ve noted the sole member has no ownership interest in LLC’s property under local law and disregarding the LLC for federal tax purposes doesn’t allow the Service to disregard the entity for purposes of collection.

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