PA LLC confusion

[schirallicpa]

My client has received a notice that they had not filed a 2019 corp return for an LLC.  I did some research on the PA DOS website and found the the LLC was created in 2013.  My client Taxpayer is the only member.  It has a separate EIN.

I have done the taxes for this client for several years.  They have never indicated that this LLC exists.  I have always reported this as Schedule C.  

So - my question is, in PA is an LLC considered a corp?  Do I need to respond by filing past due corp tax?  Or can I respond by saying the LLC has always reported as a sole proprietor.  I'm totally missing something here.  Was there some election that should have been made so the LLC would be treated as a sole?  I have never reported a different EIN on schedule C either.

 

Appreciate anyone's' help.  Thank you

 

 

[Lee B]

There are other reasons for having an EIN for a SP. Some financial institutions require an EIN before they will open a business checking account.

Some owners want an EIN so that they won't have to disclose their SSN for identity security reasons.

[schirallicpa]

My confusion lies in why the state of PA sent a notice looking for a corp return.  I am asking if PA would not leave as a disregarded entity unless an election was made.  Maybe it works differently in PA?

 

[jklcpa]

SMLLC's operating as sole proprietorships would follow the federal filing and file a Sch C for PA purposes.  For LLCs that are taxed as C corps, PA would expect a corp return PA RCT-101 to be filed.  Also, for periods prior to Jan 1 2016 for LLCs including those being taxed on Sch C as disregarded entities, PA required filing the PA RCT-101 for the Capital Stock/Franchise Tax.

https://revenue-pa.custhelp.com/app/answers/detail/a_id/1382/related/1

https://revenue-pa.custhelp.com/app/answers/detail/a_id/972/related/1

I think it is odd that PA is asking for a 2019 corporate return.  Maybe some of our PA preparers will chime in with more information on this specific issue.