Although most business owners are honest citizens, the few who are not have created a slew of regulatory requirements for everyone else. Case in point: the IRS now mandates that foreign-owned, single-member limited liability companies (LLCs) must obtain a U.S. tax identification number (TIN). Learn more about this new regulation, and how it may impact your business, in the following sections.
Understanding the Purpose of the New Regulation
The new regulation, which is supposed to ensure the United States is in line with requirements from the Financial Action Task Force (FATF), has been put into place to combat issues of tax evasion, money laundering, and terrorist financing. In addition to the requirement that all LLCs obtain a TIN, LLCs must also collect or obtain an employer identification number (EIN) for all members. Further, members may be required to file an annual tax return.
Understanding the Potential Consequences
Failure to comply with the new regulations can, at the very least, result in serious penalties. If found to be willful, consequences could also include criminal charges, which typically carry hefty penalties, fines, and possibly even jail time. To avoid such consequences, it is critical that all LLC partners follow the new guideline. If you have questions about this new regulation, or any other regulations that may be imposed on your company, an experienced business law attorney can help.
Ensure Your Business is Compliant with All Federal Regulations
Whether you have just started a new business, are planning to start up one in the near future, or have been in business for years, compliance with all federal regulations is critical to your company’s success. Obtaining a TIN is just one step in this complex but necessary process. Use this January to protect your company and its future with assistance from an experienced business law attorney. Able to review your company records to ensure you are properly governing your company, they can help you avoid possible personal liabilities.
Contact Our Palatine Corporate Law Attorneys
At Drost, Gilbert, Andrew & Apicella, LLC, we understand the complexities and issues your business may face. Dedicated and experienced, we strive to protect you and your company from legal issues. Learn more about how our Palatine corporate law attorneys can help you. Call 847-934-6000 and schedule a consultation with us today.
About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.
Source:Janet Rae Montgomery-ISBA Estate Planning and Probate “Dodoes, Loopholes, Defects and Other News Nuggets”