In a memorandum of the IRS, it addressed the issue of whether payments to limited liability companies (LLCs) were exempt from section 6401 information reporting requirements. The IRS concluded that payments to LLCs were only exempt when the LLC was classified, for tax purposes, as corporation filing Form 8832. The LLC could also be elected to be classified as partnership or disregarded entities, the payment to which then was not exempt from information reporting requirements.

See IRS Office of Chief Counsel Memorandum, No. 20147025 (November 21, 2014).

Posted by Jiaqi Wang, Associate Editor, Wealth Strategies Journal.