CPA Says SSN Okay for LLC

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Question:

We have an LLC with two members (husband and wife) and they would like to use a Social Security number for the account. In the literature from a recent webinar, it mentions that only a single member can use a Social Security number. We are speaking to the CPA for the LLC, and he is telling us that if the LLC is a "disregarded entity", that a Social Security number is acceptable. Is this correct? If so, what paperwork will we need to comply with all of our requirements if we are to allow this entity to use a Social Security number?

Answer:

If, in fact, the LLC is eligible to be considered a "disregarded entity" by the IRS, it can use the SSN of one of its members. While I have never seen anything from the IRS that says it recognizes an LLC with more than one member as a disregarded entity, it may be acceptable, since the goal is to get the LLC's income as reported on the member's (or members') tax return, and spouses often file joint returns. I suggest you get a statement from the CPA that the LLC has approval for "disregarded entity" treatment.

First published on BankersOnline.com 5/24/10