It seems counterintuitive, but you can use your consent to extend the statute of limitations on payroll tax assessments as leverage with auditors. But only if the proper party signs Form SS-10, Consent to Extend the Time to Assess Employment Taxes.
The IRS has concluded in emailed advice that a single-member limited liability company’s (LLC) owner is the correct party to sign Form SS-10. (EEC 201211019).
Note: Emailed advice is intended as private advice from the IRS to the requesting party. They may be used for informational purposes only; they may not be used or cited as precedent.
We need your signature here, here and here. For federal tax purposes, LLCs can elect to be treated as regular-tax paying corporations or pass-through partnerships for all federal tax purposes, including payroll taxes. For those LLCs, any officer or other person who is authorized to bind the LLC can sign the consent.
LLCs that don’t make this election are treated as disregarded entities for all tax purposes except payroll taxes. For payroll tax purposes, these LLCs are treated as corporations. Result: It’s the business’s name that shows up on payroll forms and in the IRS’ Business Master File. Even so, the IRS concluded that it’s the LLC’s owner who must sign Form SS-10.
PAYROLL PRACTICE TIP: LLCs offer their owners the best of all possible worlds. For general business liability purposes, LLCs work like corporations, so owners aren’t liable for their LLC’s actions. For federal tax purposes, LLCs are pass-through entities, which don’t pay taxes at the business level. But as the IRS has pointed out, care must be taken when dealing with payroll taxes. The wrong signature on the wrong form can consign a company into tax purgatory.
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