Final regulations issued by the Internal Revenue Service [Reg. § 1.1361-4, Reg. § 301.7701-2(c)(2)(iv)] will require disregarded entities to pay their own employment taxes and file all related information returns for all wages paid to employees on or after January 1, 2009. Under prior rules, a disregarded entity had a choice: it could pay its own employment taxes, or the owner of the disregarded entity could pay the taxes under the owner’s name and tax ID number. Now, all disregarded entities paying wages must have their own tax ID number. These regulations are only applicable to employment taxes. A disregarded entity continues to be disregarded for other Federal tax purposes.
“Case Note-Limited Liability Company’s Apparent Authority to Borrow Money” by John M. Carnahan, III “Bank Economic Presence Creates Nexus” by Frank C. Carnahan