Can I get a second EIN for my sole proprietorship when I already have one for my SMLLC?

7 Thanks for the explanation! If I decide to elect corporate taxation for my SMLLC, would that significantly increase my tax burden compared to the pass-through taxation I have now? Also, is there a minimum percentage ownership another person would need to have for the multi-member LLC option to work?

12 Electing corporate taxation would indeed change your tax situation significantly. You'd face potential double taxation - the corporation pays its own taxes, then you pay personal taxes on any distributions you take. However, there can be advantages like more available deductions and the ability to leave some profits in the business at potentially lower tax rates. For a multi-member LLC, there's no specific minimum percentage required by law for the second member. Even a 1% ownership interest would technically qualify. Just be aware that any arrangement should reflect economic reality - creating a partnership solely to get an EIN might be questioned if challenged. The second member should have legitimate involvement and the arrangement should be properly documented.

9 How does taxr.ai actually work? Do you upload all your business documents to them? I'm always hesitant to share my tax info with yet another online service. Did you find it was really worth it compared to just talking to a regular accountant?

14 I'm curious - did they recommend you elect corporation status for your LLC? I've heard mixed things about whether the extra protection is worth the additional tax complexity. What specific solution did they recommend for your situation?

3 You upload the documents you're comfortable sharing - I started with just my formation documents and a redacted version of my schedule C. Their AI analyzes your business structure and identifies optimization opportunities. It was definitely worth it compared to my accountant who just gave general advice that wasn't specific to my situation. For my specific case, they actually recommended a hybrid approach - maintaining my SMLLC but electing S-Corp taxation after I hit a certain income threshold. This gave me the EIN protection I wanted for W-9s while minimizing self-employment taxes. They provided a step-by-step implementation plan that made the transition really straightforward.

10 Wait, how does this actually work? I thought it was impossible to get through to the IRS these days. Are they just calling for you or is there something else going on? Seems too good to be true that they could get through when regular people can't.

19 Sorry, but this sounds like a waste of money. I've heard these services just use automated dialers which is something anyone could set up themselves. Plus, IRS agents give different answers depending on who you talk to - I wouldn't trust phone advice for something as important as business structure.

5 They use a combination of technology and knowing exactly when and how to call different IRS departments. It's not just an auto-dialer - their system navigates the IRS phone tree and holds your place in line so you don't have to. When an agent is about to come on the line, they call you to connect. You're right that sometimes IRS agents give different answers, which is exactly why I asked them to note my account with the information they provided. The agent even gave me her ID number and a reference number for the call so I could refer back to it if needed. For important tax matters, having documented phone advice is actually quite valuable - much better than guessing or following random internet advice.

16 Did you have to get a new EIN after adding your spouse, or were you able to keep using the same one you had before? Also, did this change affect any of your existing contracts or business relationships?

8 I was able to keep using my original EIN, which made the transition much smoother. The IRS considers it a "change in tax classification" rather than a new entity. I just had to start filing partnership returns instead of reporting everything on Schedule C. None of my existing contracts were affected since the legal entity remained the same LLC - just the internal ownership structure changed. I did send updated W-9 forms to all my regular clients just to be thorough, but technically it wasn't even necessary since the EIN stayed the same. The biggest adjustment was getting used to the more complex tax filing process, but tax software makes it pretty manageable.

11 I've never heard of these services before. Is this actually legitimate from an IRS perspective? I'd be worried about getting flagged for audit if the numbers don't match up in the IRS systems.

I'm also skeptical about these "proxy" EIN services. The IRS requires that the taxpayer identification number on Form W-9 match exactly what's in their systems for the actual taxpaying entity. Using a third-party proxy number could create serious compliance issues, especially if the IRS can't properly match 1099s to your tax return. I'd be very careful about any service that claims to provide substitute tax ID numbers - this sounds like it could violate federal tax reporting requirements. Has anyone verified this is actually legal?

I have to agree with Brady - these "proxy EIN" services sound extremely questionable from a legal standpoint. The IRS Form W-9 instructions are very clear that you must provide your correct taxpayer identification number as it appears in IRS records. Using a third-party proxy number would essentially be providing false information on a federal tax form, which could have serious consequences. The whole point of the TIN matching system is to ensure 1099s and other tax documents can be properly matched to the correct taxpayer. I'd strongly recommend sticking with legitimate business structure changes rather than relying on services that may put you at risk of IRS penalties or audit issues.

I have to echo the concerns raised by Brady and Derek about these "proxy EIN" services. As someone who's dealt with IRS compliance issues before, I can tell you that providing anything other than your actual TIN on Form W-9 is a recipe for disaster. The IRS has sophisticated matching systems that will flag discrepancies between the TIN you provide and what's in their database. Even if a service claims to "forward" documents, you're still responsible for ensuring all tax reporting is accurate and complete. The penalties for providing false information on tax forms can be substantial, and it's just not worth the risk when there are legitimate options like S-Corp election or adding a member to convert to a partnership. Stick with the tried-and-true methods that won't put you crossways with the IRS.

Great questions, Dmitry! I can share some insights from when I went through this process. For the K-1 distributions, the family member doesn't necessarily need to be involved in day-to-day operations, but they do need to have some legitimate economic interest in the business. The IRS looks for "economic substance" - meaning the arrangement should reflect real business considerations, not just be a tax avoidance scheme. In my case, my spouse handles some administrative tasks like bookkeeping and client communications, which justifies their ownership percentage. Even if your family member isn't operationally involved, they should at least understand they're receiving partnership income that needs to be reported on their personal tax return. Regarding state complications - definitely check your state's specific requirements before making changes. Some states have different rules about LLC ownership changes, annual fees, or franchise taxes that could affect your decision. I'd recommend consulting with a local business attorney or CPA who understands your state's regulations before proceeding with any structural changes.