Treaty Investors

[cfsadvsr]

I have a treaty investor client from Romania who has a wife and 2 children here in the US. The husband has a single member LLC, which is a holding company for 2 sole proprietorships. Can the LLC elect to be treated as an SCorp? and how do I file the 2 sole proprietorships and combine them for the LLC? Also, is he able to get #s for his 2 children so he can claim them as dependents? They were told they wouldn't need ss#s for the children by the social security dept. I presume they'll need to file a 1040NR for the personal return.

[Lion]

Don't think an S-Corp can have a foreign shareholder. Is he a permanent resident? You'll probably need ITINs for his family. And, if there are two disregarded entities held by the LLC, then they are disregarded for tax purposes and reported on the return for the LLC, whatever it is taxed as. (Just like my sole proprietorship appears on my Form 1040 and not on a separate return.)

[erchess]

What is a "Treaty Investor" and where can I read more about such people?

Is everyone in the client's family including him here legally?

Is the taxpayer a permanent resident of the US?

And did you get any reason for the children not needing SSN's?

I agree with Lion that he can't be a shareholder of an S Corp unless he himself is here legally and is either a US Citizen or a permanent resident. To claim children and wife they need numbers either ITIN or SSN. I would guess that as an EA you know how easy they both are to apply for. I personally would not worry about what some SS Administration Employee told your client. If the Employee correctly understood all the facts and if the client correctly understood what he was being told all it means is that the SSA does not require the kids to have SSNs. It means absolutely nothing about tax issues. And please I don't mean to be insulting government employees or immigrants. Failure to communicate happens a lot and SSA Employees are not expected to have tax knowledge. They have enough on their plates doing their jobs.