Legal Question in Tax Law in Florida

I was asked to become a part of an LLC which I agreed to in the beginning of 2014. The LLC however was already in exsistance prior to 2014. Several primary members have changed. The "owner" who is not listed anywhere on any document now states taxes need to be filed. There was no income in made and nothing spent in 2013. This should be easy, right? Well, here's the issue. There is no EIN number. Apparently no one in the LLC filed for an EIN number and now new paperwork has been filed and and EIN number can't be applied for because the new paperwork is not completed yet (and my feeling is that the EIN number will be for 2014, not 2013 (and for me that's an issue using that EIN for 2013). So even though it's a zero in and a zero out, and I've read as much as I can on the IRS rules, I see no where that I can get around this to file the form 1065 for 2013 (which by the way is now late!). This concerns me because on the new submission I am listed as the Business Manager and MY social security number was placed on the forms sent to the state. I don't think this person would take advantage of me, but you just never know. He doesn't work, has a minimal income; but his product is really great should it get off the ground and running...I have already helped with some cash flow, but it doesn't seem to be enough. I was okay with all of this until this tax thing came up--and when reading the instructions became very concerned. It also looks like there is going to be a penalty for being late with this...but how does one file without an EIN number? Should I ask him to use his social security number? And if he doesn't would it be foolish for me to continue with this venture? Up to this point I had no reason for doubt. He has a business license, a fictitious name registration and a lawyer, so I thought this was all on the up and question is 1) can I file this 1065 without an EIN number? 2) how would I do that? 3) Could I just leave it blank? 4) what are your suggestions.... I have a significant amount of savings that I have saved for a very long, long time and I don't want to have those savings touched by anything-including this there any chance of that-ever??? This is my life savings....if there is, then how do I get out of this mess? And what do I tell him to get out of it and why?

Asked on 3/18/14, 8:09 pm

1 Answer from Attorneys

Thomas Shigo The Shigo Law Firm, P.A.

In Florida, no Social Security Number or EIN is needed to create an LLC. The filed Articles of Organization basically list the business address, designate one or managers (who may or may not be LLC members) and designate a resident agent for service of process. However, once the LLC begins operating an EIN is required to comply with IRS filing requirements. (You may also need a FL sales tax ID and Unemployment Tax ID). The IRS taxes LLCs like partnerships (unless a timely election is made) and the correct form is a 1065. In general, the LLC is not taxed. It is a flow-through entity, meaning that the members are taxed on their respective share of the income and expenses. In preparing the 1065 a K-1 is generating detailing this for each member. You cannot file the return without an EIN. The EIN can be obtained online in a few minutes. The EIN is for the entity and the year does not matter. Since, the income is not taxed to the LLC, the late filing penalties should be nominal. I am more concerned that you are making capital contributions to the LLC without a written Operating Agreement detailing each member's interests, rights and obligations. You should see an attorney about that.

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Answered on 3/20/14, 9:15 am

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