Partnership LLC to Single member LLC

[judys3]

I have a customer that is a father and son business.  The dad is stepping away and I am wanting to just convert the partnership llc to a single member llc.  From some things I have read I need to obtain a new ein but others are saying it is not necessary.  What are your thoughts?

[George4Tacks]

 You need to file a final Partnership and quit using that EIN. There is now a Schedule C disregarded entity that MAY need to get a new EIN, if there are employees. 

There may be tax consequences of dad stepping away. Was there equipment? If there some gifting going to happen? 

[TaxGuyBill]

An LLC with more than member that goes to a single member does NOT need a new EIN.

https://sa.www4.irs.gov/modiein/individual/help/help-toc.jsp

However, the EIN for an LLC is only used for payroll and excise taxes.  For income tax purposes (such as filling out a W-9 and receiving 1099s), the W-9 instructions indicate that they would want to use an EIN under the name of the individual person (not in the name of the LLC).

[judys3]

So for W9 purposes I could just use his SS# instead of obtaining a new ein?  

[Jim-from-Ohio]

If someone (legit) is requsting a W-9 and the your client is a single member LLC, the instructions that accompany the W-9 say to use the SSN

[TaxGuyBill]

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@judys3 wrote:

So for W9 purposes I could just use his SS# instead of obtaining a new ein?  

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You could, but why?  For security purposes, I certainly would not want to be handing out my Social Security Number for anybody that asks for it.  And it only takes a few minutes to get a free EIN.

[Accountant-Man]

I agree that the instructions say to use the SSN, but I use the EIN.

[Jim-from-Ohio]

I don't like using the SS# in these cases. has there ever been a letter saying wrong TIN used?

[TaxGuyBill]

I'm puzzled at why you guys think the W-9 instructions say to use the SSN.  It says you can use either the SSN or the EIN of the owner.

[Jim-from-Ohio]

I would like to know for sure also on this topic.. The wording on the W-9 instruction part seems to be clear in one regard but then it seems to contradict itself below. first from the instructions:

If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN

ok.. so where it says: If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN.

it talks about, or, EIN, if the owner has one.. i read that as if the owner, the person has an EIN in addition, separate from the LLC's EIN.  I do a lot of single member LLCs, all have an EIN but not one of them has an owner, a person that has their own EIN for the person.  any thoughts?

[TaxGuyBill]

As my first comment above said, the owner should have an EIN in their personal name (not the name of the LLC) for income tax purposes (including a W-9).