Tax News

CCH (cch.taxgroup.com) reports:

  An individual who was the sole member of a limited liability company (LLC) was liable for the LLC's unpaid employment taxes. The court rejected the individual's argument that the Code Sec. 7701 regulations making the sole member of an LLC liable for the entity's employment taxes were invalid. The regulations at issue were a reasonable attempt by the IRS to fill in gaps left in the statute regarding the taxation of LLCs. Also, the IRS's decision to adopt an alternative approach did not strip the regulations of Chevron deference. Finally, a new regulation adopted by the IRS regarding a sole member's liability for an LLC's employment taxes did not apply because it was not in effect for the tax year at issue.

  Unpublished opinion affirming a DC Wash. decision, 2006-1 USTC ¶50,231.

E.A. Kandi, CA-9, 2008-2 USTC ¶50,599

Other References:

 
Code Sec. 7701

  CCH Reference - 2008FED ¶43,084.15

  CCH Reference - 2008FED ¶43,087.72

 
Code Sec. 7805

  CCH Reference - 2008FED ¶43,282.169

  Tax Research Consultant

  CCH Reference - TRC LLC: 9,050