Daniel Janovitz is an Associate in Holland &
Knight's
Fort Lauderdale office
A recent IRS Chief Counsel Advice (CCA) clarifies who may sign a
limited liability company's (LLC's) tax return when the LLC
has a corporate managing member. CCA 201536025 addresses a
situation in which a LLC (LLC-1) taxed as a corporation is managed
by another LLC (LLC-2). LLC-2 is a single-member LLC, which is
solely owned by a corporation. The CCA concludes that the officer
of the corporation that owns LLC-2 has authority to sign
LLC-1's return and the IRS can rely on the signature absent
proof to the contrary indicating that the officer does not have
such authority.
Additionally, the CCA notes that the LLC may be equitably
estopped from asserting in the future that the officer did not have
the authority to sign the tax return, a power of attorney or
extensions of time for the IRS to assess tax (Form 872).
