Incorrectly filed EIN for LLC showing wrong ownership structure - How to fix?

This is actually a pretty common mix-up with multi-entity structures. You'll need to file Form 8832 (Entity Classification Election) to correct this issue. Since you accidentally set up LLC #2 as a multi-member LLC owned by individuals instead of a single-member LLC owned by LLC #1, you'll use Form 8832 to elect how you want LLC #2 to be treated for tax purposes. On Form 8832, you'll indicate that you want to change the classification of LLC #2. Make sure to check the box for "a domestic eligible entity with a single owner electing to be disregarded as a separate entity" if that's your intention. Include a statement explaining the correction you're making regarding ownership. You'll also want to update your operating agreement for LLC #2 to clearly reflect that LLC #1 is the sole member.

I had this exact problem last year and honestly was super stressed about it. I ended up using taxr.ai (https://taxr.ai) to analyze my LLC documents and EIN application. Their system flagged the ownership structure issue right away and gave me step-by-step guidance on filing the correction. What I found most helpful was that they explained exactly what sections of Form 8832 to fill out for my specific situation and helped me draft the explanation statement to include with the form. Saved me a ton of time researching and second-guessing myself.

Just wanted to follow up about my experience with taxr.ai - I decided to try them after seeing the recommendation here. Uploaded my LLC docs and EIN paperwork last week and I'm really glad I did. They spotted additional issues I hadn't even realized existed with my operating agreement that would have contradicted the ownership correction I was trying to make. They provided a full analysis document explaining what changes were needed for both the Form 8832 and my operating agreement to make everything consistent. Already submitted everything to the IRS and my state's business filing office. The whole thing was way more straightforward than I expected after stressing about it for weeks.

After trying to call the IRS for WEEKS about my similar LLC problem (literally couldn't get through), I finally used Claimyr (https://claimyr.com) and got connected to an IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent confirmed that Form 8832 was the correct approach but also told me I needed to include a detailed written statement explaining the error on the original EIN application. Apparently without that statement, they often reject the correction request. Also got confirmation that I didn't need to cancel the old EIN and request a new one, which was a relief.

Ok I need to eat my words. After posting my skeptical comment yesterday, I was still desperate to reach the IRS about my LLC's EIN mess-up, so I tried Claimyr as a last resort. Was SHOCKED when I got a call back connecting me to an actual IRS business division agent within 45 minutes. The agent confirmed everything the previous commenter said - Form 8832 is the way to go, but you need to include a detailed letter explaining the original error. She also told me something I hadn't seen mentioned - if your LLC has already filed any tax returns under the incorrect classification, you might need to amend those returns after the Form 8832 is processed. In my case, it's a new LLC so no returns filed yet, which makes it easier.

Ok I need to eat my words. After posting my skeptical comment yesterday, I was still desperate to reach the IRS about my LLC's EIN mess-up, so I tried Claimyr as a last resort. Was SHOCKED when I got a call back connecting me to an actual IRS business division agent within 45 minutes. The agent confirmed everything the previous commenter said - Form 8832 is the way to go, but you need to include a detailed letter explaining the original error. She also told me something I hadn't seen mentioned - if your LLC has already filed any tax returns under the incorrect classification, you might need to amend those returns after the Form 8832 is processed. In my case, it's a new LLC so no returns filed yet

Just to add another perspective - I made a similar mistake and tried fixing it myself without professional help. Big mistake! The correction was rejected because I didn't complete Section 4 of Form 8832 correctly. If you're doing this yourself, make absolutely sure that: 1. You check the right box for your desired classification 2. You fill out Section 4 completely with the correct responsible party info 3. You include a DETAILED statement explaining the correction 4. You get signatures from anyone who's authorized under state law Learn from my fail and either get professional help or triple-check everything!

Has anyone considered just starting over with a new LLC? I'm in a similar situation and wondering if it would be cleaner/faster to just dissolve the wrong LLC and create a new one with the right structure from the beginning?

I went through this exact same situation about 6 months ago with my consulting LLC. The stress was real! Here's what I learned from the process: First, definitely go with Form 8832 as others have mentioned. But here's what I wish someone had told me upfront - the IRS is VERY particular about the written statement you include. Mine got rejected the first time because my explanation wasn't detailed enough. For the statement, make sure you include: (1) the exact error you made on the original EIN application, (2) what you intended the ownership structure to be, (3) why this correction aligns with your actual business operations, and (4) the effective date you want the change to take place. Also, if you haven't done any business activity yet under the incorrect structure (no tax returns filed, no significant transactions), mention that in your statement - it strengthens your case for the correction. One more tip: keep copies of EVERYTHING and send the form via certified mail. The IRS processing times can be unpredictable, and having proof of when you submitted helps if you need to follow up. The whole thing took about 8 weeks from submission to getting the acceptance letter, but it was worth it to have everything properly structured for tax purposes. Good luck!

I'm dealing with this exact same issue right now! Filed my EIN application last month for a new LLC that was supposed to be owned by my existing S-corp, but I accidentally listed myself and my partner as the individual owners instead. Reading through all these responses has been super helpful - sounds like Form 8832 is definitely the way to go. I'm particularly concerned about the timeline since I need to get this straightened out before year-end for tax purposes. One question I haven't seen addressed: if I file the Form 8832 now to correct the ownership structure, will this affect any contracts or agreements I've already signed under the LLC? I've got a couple of vendor agreements in place and I'm worried about creating complications there. Also, for those who have been through this process - did you notify your state's business filing office about the ownership change, or is the federal Form 8832 sufficient? My state requires an annual report that asks about ownership structure, so I want to make sure everything stays consistent. Thanks everyone for sharing your experiences - this community has been a lifesaver for navigating these business filing headaches!

@AstroExplorer - Morgan is spot on about the contracts! I went through this same correction process earlier this year and was worried about the same thing. Your existing vendor agreements will be fine since you're not changing the legal entity itself, just the tax classification. Regarding state filings, it really does vary by state. In my case (Delaware), I didn't need to update anything at the state level since the Form 8832 is purely a federal tax election. But when I filed my annual report later, I made sure the ownership information matched what I had corrected federally just to keep everything consistent. One thing I'd add to the timeline discussion - if you're really pressed for time and need confirmation before year-end, consider using certified mail with return receipt when you submit Form 8832. That way you have proof of when the IRS received it, which can be important if there are any questions about the effective date of your election. Also, since you mentioned you just filed the EIN last month and it sounds like you haven't done much business activity yet, make sure to emphasize that in your written statement. The IRS tends to be more accommodating with corrections when there's minimal business activity under the incorrect classification. Hope this helps, and definitely get that form submitted soon if you want it resolved by year-end!

@Ethan Clark - In my experience, the IRS typically doesn't ask for additional documentation beyond Form 8832 and your written statement, as long as you're thorough in your initial submission. However, there are a few things that can help ensure a smooth process: Make sure your written statement is comprehensive and includes all the details others have mentioned (the specific error, intended structure, why it aligns with actual operations, etc.). The more complete your explanation, the less likely they are to come back with questions. If you have your LLC's operating agreement drafted already, some people include a copy with their Form 8832 to demonstrate the intended ownership structure, but this isn't required. Since your situation is straightforward (correcting individual ownership to corporate ownership), the form and statement should be sufficient. The main thing that triggers additional documentation requests is when the IRS can't clearly understand what correction you're trying to make or if there are inconsistencies in your filing. Given that you're catching this early with minimal business activity, you should be in good shape. One practical tip: keep a copy of your original EIN application confirmation handy in case you need to reference the specific language you used that caused the confusion. This can help you write a more precise explanation of the error. You're on the right track getting this submitted this week - the earlier in the tax year you get it resolved, the cleaner everything will be for filing season!

I just went through this exact same situation a few months ago and completely understand the stress! The good news is that Form 8832 really is the right solution for fixing EIN ownership structure errors. One thing I'd add to all the great advice here - when you're writing your detailed statement to accompany Form 8832, be very specific about the exact question on the EIN application that caused the confusion. In my case, I mentioned that SS-4 Question 7a asks "Name of principal officer, general partner, grantor, owner, or trustor" which led me to list individual names instead of the parent LLC. Also, since your first LLC is taxed as an S corp, make sure your written statement clarifies that you want the second LLC to be treated as a disregarded entity for tax purposes (assuming that's your intent). This will help the IRS processor understand exactly what classification you're electing. The timeline others mentioned (6-8 weeks) has been pretty accurate in my experience. I submitted in March and got my acceptance letter in early May. The key is getting everything right the first time - that detailed written statement really is crucial for avoiding rejections. Good luck with the correction! It's definitely fixable and much more common than you might think.

I'm dealing with a very similar situation right now! I made the exact same mistake when filing for my LLC's EIN - indicated individual ownership instead of having it owned by my existing business entity. Reading through all these responses has been incredibly helpful, especially the specific advice about Form 8832 and the importance of that detailed written statement. One thing I'm curious about that I haven't seen mentioned - has anyone dealt with this situation where the parent entity (LLC #1) has multiple members? In my case, the first LLC has three partners, and we want the second LLC to be owned by that first LLC. I'm wondering if this adds any complexity to the Form 8832 process or if it's still straightforward since we're just changing from individual ownership to single-member LLC ownership (with the parent LLC as the single member). Also, I appreciate everyone sharing the realistic timelines. 6-8 weeks seems to be the consensus, which helps me plan accordingly. The stress of thinking I'd completely messed up the business structure is real, so it's reassuring to see this is both fixable and more common than I initially thought!