An LLC formed back in 2004 and I believe started operating
as a partnership with two partners. Unfortunately, one of
the "partners" was paid payroll with taxes taken out for
work she performed in the partnership (instead of taking
guaranteed payments). The other (main) partner was not paid
and the company did not make money. Since they really were
really operating as an S-corporation and withholding taxes
as they went, we requested to be taxed as an S-corporation
for both years under Rev Proc 2004-48. The IRS denied the
request because the request wasn't received within 6 months
after the due date of the 2004 return.
1. How could we file a partnership return with one of the
partners receiving wages?
2. Since the IRS doesn't really know who the partners are
yet, what about filing the partnership return with the K-1
going to the partner's (who received wages) husband?
3. If neither of these would work, would it be beneficial to
request a Private Letter Ruling?
Thanks for any input.
Wayne Rivers, CPA