Hello group members,
I recently came across this scenario, so I felt I should share it with you. As you know, many Regional Centers happen to work as LLC's (Limited Liability Company), and LLC's can elect to be taxed as either a partnership, sole proprietorship, s corporation or c corporation, depending on the number and type of members.
For an LLC to be taxed as a sole proprietorship to avoid double taxation, the IRS requirement is posted at http://www.irs.gov/businesses/small/article/0,,id=158625,00.html.
For an LLC to elect taxation as a partnership or S corporation to avoid double taxation at both personal and corporate levels, the number of investors is limited by law and they must be eligible to have US Social Security Numbers (i.e. Citizens and residents) and LLC's that have members who aren't citizens or permanent residents may be committing tax fraud when they admit members who aren't citizens or permanent residents and continue single taxation when legally they're required to have double taxation. As such, it is EXTREMELY IMPORTANT for investors to see if the LLC's are complying with the tax laws as the failure to comply with tax laws is imputed to all members of an LLC. An LLC which engages in single taxation when legally they're supposed to have double taxation (electing to be taxed as C corporation) may possibly be engaging in tax fraud.
It is a lot more advisable for investors to take their money and invest in their own business where their own CPA & adviser can guide them on how to proceed and what changes to make at what step, because it is better than forfeiting funds to the IRS due to the carelessness of an irresponsible idiot.
As such, please feel free to ask the Regional center you are considering about their structure and how they are complying with the tax laws.
The above is simply my personal opinion and is NOT to be construed as legal advice. Please consult your own CPA and attorney to independently check facts for yourself and get accurate advice. Also, please double check with the IRS if a non-resident and non-citizen can legally qualify for single taxation in an LLC that elects to be taxed as a partnership or S corporation, before you invest your hard earned money in a Regional Center that will cause you to lose your hard earned money.
I recently came across this scenario, so I felt I should share it with you. As you know, many Regional Centers happen to work as LLC's (Limited Liability Company), and LLC's can elect to be taxed as either a partnership, sole proprietorship, s corporation or c corporation, depending on the number and type of members.
For an LLC to be taxed as a sole proprietorship to avoid double taxation, the IRS requirement is posted at http://www.irs.gov/businesses/small/article/0,,id=158625,00.html.
For an LLC to elect taxation as a partnership or S corporation to avoid double taxation at both personal and corporate levels, the number of investors is limited by law and they must be eligible to have US Social Security Numbers (i.e. Citizens and residents) and LLC's that have members who aren't citizens or permanent residents may be committing tax fraud when they admit members who aren't citizens or permanent residents and continue single taxation when legally they're required to have double taxation. As such, it is EXTREMELY IMPORTANT for investors to see if the LLC's are complying with the tax laws as the failure to comply with tax laws is imputed to all members of an LLC. An LLC which engages in single taxation when legally they're supposed to have double taxation (electing to be taxed as C corporation) may possibly be engaging in tax fraud.
It is a lot more advisable for investors to take their money and invest in their own business where their own CPA & adviser can guide them on how to proceed and what changes to make at what step, because it is better than forfeiting funds to the IRS due to the carelessness of an irresponsible idiot.
As such, please feel free to ask the Regional center you are considering about their structure and how they are complying with the tax laws.
The above is simply my personal opinion and is NOT to be construed as legal advice. Please consult your own CPA and attorney to independently check facts for yourself and get accurate advice. Also, please double check with the IRS if a non-resident and non-citizen can legally qualify for single taxation in an LLC that elects to be taxed as a partnership or S corporation, before you invest your hard earned money in a Regional Center that will cause you to lose your hard earned money.
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