If you haven't seen it, the Second Circuit Court of Appeals (generally a pretty good court) recently issued a decision concerning LLC's. They said that the (single member) LLC election to be treated as a proprietorship or a corporation is not only effective for purposes of how the organization is taxed. But it also applies to whether or not the LLC members are personally liable for unpaid business taxs. If the taxpayer had checked the "corporation" box, he would owe nothing personally. But since he checked the "proprietorship" box, they decided that he has to pay. I suppose the case has some appeal from the standpoint that the income was attributed to the taxpayer individually, and the IRS may not have really known about the LLC. On the other hand the check-box system was set up for determining how the organization would be taxed, not who is responsible for payment of the tax. As far as I'm concerned the opinion is very poorly reasoned and shows very little understanding of tax law. The case is called McNamee v. IRS, and you can find it here:
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