SMLLC should have been MMLLC taxed as partnership

Technical topics regarding tax preparation.
#1
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Had new client a year ago who started a company before they were a client of mine. Prior accountant handled it on Sch C and I was provided EIN letter from client saying its a SMLLC.

Found out recently there is an operating agreement that lists an additional owner and that it should be a partnership. Partner requesting 2022 k1 even though they never received one in the past.

2020 and 2021 were filed as Sch C, 2022 personal return extended.

I guess you would have to get a new EIN for the entity and go back and file partnership returns for those years now?
What is best way to handle payroll since there will be a new EIN?
How much penalties can they get forgiven?

I've read about this happening more than it should, but just want to get a decent direction on how to proceed.. also what precautions do you take to prevent something like this from happening? Most people I deal with SMLLC, don't even have operating agreements or know what it is when I ask for it.
 

#2
Nilodop  
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Most people I deal with SMLLC, don't even have operating agreements or know what it is when I ask for it.
If they used a lawyer to form the LLC, they'd have one, I assume.
If they formed it themselves, wouldn't the site they used offer them one, or even require them to create one?
 

#3
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Why get a new EIN?
Use the existing EIN and file your 1065.
~Captcook
 

#4
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I see a lot of people self file on state website or a past preparer file for them with no operating agreement.

Per IRS ,
"You will be required to obtain a new EIN if any of the following statements are true.
-You are subject to a bankruptcy proceeding.
-You incorporate.
-You take in partners and operate as a partnership.
-You purchase or inherit an existing business that you operate as a sole proprietorship. "
https://www.irs.gov/businesses/small-bu ... -a-new-ein
 


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