Documents Your Accountant Needs From a New LLC or Corporation

What documents does an accountant need for a new LLC or corporation's taxes?

Send the papers that show what the company is, who owns it and how the IRS classifies it, plus every bank and card record from the first deposit. The accountant builds the books and the first return from them (Publication 583). Most can be copied again from the state, the IRS or the bank if lost; ownership papers cannot, so keep them safe.

Form 2553 asks for each shareholder's shares (or percentage, for an LLC), dates acquired and tax ID number, and an S corporation can have no nonresident alien shareholders (Form 2553 instructions). Each partnership K-1 shows the partner's tax ID number and whether the partner is foreign (Form 1065 instructions).

What makes a first year not simple: an election that was filed but never confirmed, owners who paid costs personally, a business that ran in an owner's own name before formation, a second owner who joined during the year, founder stock that vests, or an owner who is not a US citizen or resident. Each can change which return is filed or what goes on it, so name it when you send the papers.

For what is due after formation, see after you form your company. For the return itself, see your first business tax return; for a short first year and its due date, see the first tax year of a new company.

Why does the accountant need the EIN letter and the exact legal name?

IRS systems match each business return to the EIN and the name on IRS records, so the accountant copies both from the EIN letter. For e-filed business returns, the EIN and the name control (generally the first four characters of the name) are checked against IRS records, and a name control mismatch is one of the most common reasons a return is rejected (Publication 4163). The EIN application takes the name as it appears on the formation documents, using only letters, numbers, hyphens and ampersands (IRS EIN page).

• New EIN: usable at once for a bank account or a mailed return, but it can take up to 2 weeks before it works for e-filing or electronic tax deposits and payments (IRS EIN page).
• Responsible party: the EIN application names the person who controls the entity and its assets. A change of responsible party is reported on Form 8822-B within 60 days (Form 8822-B).
• Single-member LLC with no election: on a Form W-9 for a client, the owner's name goes on line 1 and the LLC's name on line 2, with the owner's Social Security number or EIN, not the LLC's EIN (single-member LLCs; W-9 requester instructions). For payroll, the same LLC uses its own name and EIN.

If the EIN letter is lost, never arrived or shows a different name, see EIN delayed, lost or not matching.

Which election papers decide the return type?

The number of owners and any election the IRS accepted decide the return (LLC filing as a corporation or partnership; single-member LLCs).

Exception: spouses who own an LLC together as community property, in a community property state, may report it as a partnership or as a disregarded entity (Rev. Proc. 2002-69). Tell the accountant which way it has been reported; see spouse and family LLCs.

A nonresident alien owner files Form 1040-NR (CP277), and an LLC wholly owned by a foreign person also files Form 5472 with a pro forma Form 1120 for any year it has a reportable transaction with its owner, including money put in (Form 5472 instructions). See foreign-owned single-member LLC filing.

The IRS acceptance notice matters more than the filed copy. The IRS generally decides on a Form 8832 within 60 days (Form 8832 instructions) and on a Form 2553 within 60 days. If no answer arrives within 60 days of filing Form 8832, or 2 months of filing Form 2553, the instructions say to follow up with the IRS. If the IRS questions whether an election was filed, it accepts a timely postmarked certified or registered mail receipt, a copy with an IRS stamp, or the IRS acceptance letter as proof (Form 2553 instructions).

• Form 2553 timing: due no later than 2 months and 15 days after the tax year it covers begins. For a new company, that year starts on the earliest of the dates it first had shareholders, had assets or began business. Shareholders must sign consents, and an LLC that files Form 2553 does not need a separate Form 8832.
• Form 8832 timing: the election can take effect up to 75 days before or 12 months after the date it is filed, so send the filing date with the form. Before the effective date the default rule applies; on that date the company is treated as moving its assets and liabilities into a corporation for stock (Form 8832 instructions).
• Form 8832 copy: a copy is attached to the return for the year of the election. Leaving it off does not void the election but can bring penalties (Form 8832 instructions).

Send the whole filed form with signatures and consents, the mailing or fax proof, and the notice (CP277; CP261). If you are not sure what the IRS has on file, see how the IRS classifies your LLC.

What ownership records does the accountant need?

The accountant needs a record of who put in what, when, and for what share.

• LLC with two or more owners: the operating agreement and each member's contributions of cash and property, with dates. For property, also record what the member paid for it, less any depreciation already claimed: each K-1 capital account generally uses that tax figure, not market value (Form 1065 instructions). See partner capital accounts.
• Corporation: the board consent issuing shares, the stock ledger, and what each shareholder paid in money, property or services. Shareholders exchange money or property for stock (Publication 583), and the Form 1120 balance sheet shows capital stock apart from loans from shareholders (Form 1120).
• S corporation: the shareholders, shares and dates on Form 2553 should match the stock ledger. An S corporation can have only one class of stock: the charter and bylaws, or an LLC's operating agreement, must give every ownership interest the same rights to distributions and liquidation proceeds; voting rights may differ (Form 2553 instructions; Reg. 1.1361-1(l)).
• Founder stock that vests: a founder who files a section 83(b) election, due within 30 days after the stock is transferred, must give the company a copy (Publication 525). Send each copy with the ledger. In an S corporation, unvested shares count as outstanding stock, and their holder as a shareholder, only if this election was made (Reg. 1.1361-1(b)(3)). See founder shares that vest.
• A second owner joins: send the date and terms. A single-member LLC that has not elected corporate status becomes a partnership when it gets a second member (Form 8832 instructions), which changes the return for that year.

What money records does the accountant need from day one?

The accountant needs every business bank and card statement from the first deposit, the documents behind each entry, and a record of all money owners put in, lent or paid for the company. Publication 583 says to open a business account early, keep it separate from personal accounts and deposit all receipts in it (Publication 583). If company money went through a personal account, send those statements too and mark the business lines; see fixing mixed business and personal funds.

• Supporting documents: invoices, sales records, deposit slips, receipts and paid bills. A statement can prove a payment if it shows the amount, payee and date; the receipt shows the cost was for the business (Publication 583).
• Costs paid personally before the account opened: keep each receipt with its date and purpose, and tell the accountant the date the business began: start-up costs follow their own deduction rules, and that date decides which costs count (Publication 583). See startup costs paid personally.
• A business that ran before the company: send the date it moved into the company and a list of the equipment, cash and accounts moved in, with what each cost. See changing your business structure.
• Owner loans: the balance sheet shows loans from shareholders or partners apart from owners' capital (Form 1120; Form 1065 instructions). Note the source of each deposit, such as business income, owner's money or a loan (Publication 583), and send any signed note with its amount, date, interest and repayment terms. Whether money is truly a loan depends on the facts.

What about payroll, contractors and sales tax registrations?

Send what exists, and say so when nothing does yet.

• Payroll: if the company pays wages, send the payroll registers, filed Forms 941 (or Form 944, if the company files yearly) and 940, Forms W-2, and the state withholding and unemployment account numbers. See setting up payroll.
• Contractors: get a Form W-9 from each contractor before paying. Without a taxpayer ID number, the company may have to withhold part of the payment as backup withholding (Publication 583), and it may become liable for any amount it should have withheld but did not (W-9 requester instructions). A Form 1099-NEC is generally required for $2,000 or more paid to one contractor for services in the tax year (IRS); forms for this tax year are due February 1, 2027 (information return instructions). See which contractors get a tax form.
• Sales tax: states, not the IRS, issue sales tax permits. Send each permit with its account number and the filing schedule the state assigned. See when you must collect sales tax and filing sales tax returns.

Which state papers does the accountant need?

Send every state account number and filing confirmation the company has; which ones exist depends on the states involved. The IRS keeps a list of state government websites for finding each agency.

• State tax account numbers: income or franchise tax, payroll withholding, unemployment and sales tax.
• Confirmations of any annual report, statement or franchise tax the formation state requires.
• Registrations in other states where the company registered to do business. See registering in another state.

Whether the company files a beneficial ownership report with FinCEN is a separate question: see BOI reports.

How long should a new company keep these records?

Keep records that support a return until the period of limitations for that return runs out, and keep formation, EIN and election papers for the life of the company. The IRS asks owners to keep the EIN notice and the S election notice in permanent records (CP575; CP261).

The general period is 3 years after filing, and some records need longer, such as payroll records, records for a year with unreported income, and records of property the company still owns (Publication 583; how long to keep records). For each period, see how long to keep business records.

How do I give the accountant IRS access without sharing passwords?

Sign Form 8821 or Form 2848 instead of sharing your IRS sign-in, which is the same one that opens your personal IRS account (business tax account). The form gives the accountant access in their own name, for the tax types and years you list.

Sources: Form 8821 instructions; Form 2848 instructions. Both can be submitted online (About Form 8821). The IRS records future years only up to 3 years after December 31 of the year it receives the form. For a corporation, an officer with authority to bind it signs Form 8821; for a partnership, a partner during the years listed.

The IRS business tax account shows notices, transcripts and the EIN verification letter. It is not yet available for an LLC that reports on Schedule C or F, and a corporation's designated official must be an officer who received a Form W-2 for the most recent filing year, so a corporation in its first year may not qualify yet. Once the account is set up, its designated official can add people as designated users (business tax account).

What if some of these documents are missing?

Most papers can be replaced. Flag a missing election notice at once, because it decides the return.

If an election was filed late or never went through, relief has its own conditions and deadlines: see late S corporation election relief and late LLC tax election relief.

Example

These examples are illustrative and use US dollars.

A single-member LLC formed in March

An owner forms an LLC in March, gets an EIN online the same week and opens a business account in April. Before that she paid US$2,000 on a personal card for the state filing fee and a website. She sends the articles of organization, the EIN letter, statements from April on, and her card statement and receipts for the US$2,000. No Form 8832 or 2553 was filed, so the LLC is disregarded and its income goes on her Schedule C. The accountant records the US$2,000 as paid by the owner and sorts each cost by whether it came before or after the business began.

Two founders of a corporation with an S election

Two founders, both US citizens, incorporate in January. Each buys 5,000,000 shares that vest over four years, files a section 83(b) election within 30 days and gives the company a copy. The corporation files Form 2553 in February with both consents, and the CP261 arrives in April. They send the certificate of incorporation, bylaws, the board consent issuing shares, the stock ledger showing 5,000,000 shares each, both 83(b) copies, the signed Form 2553, the CP261 and the bank statements. The return is Form 1120-S, with a Schedule K-1 for each founder.

An LLC with a Form 8832 but no acceptance letter

A two-member LLC formed in May filed Form 8832 in June to be taxed as a corporation from its first day. By September no CP277 has arrived. Before preparing anything, the accountant asks for the filed form and the mailing receipt and checks the IRS record. If the election was accepted, the LLC files Form 1120 and attaches a copy of Form 8832. If the IRS has no record and there is no proof of filing, the default rule makes it a partnership filing Form 1065 unless late election relief is granted.

Different for you?

• An election was filed but never confirmed, or filed late: see late S corporation election relief, late LLC tax election relief and how the IRS classifies your LLC, and get corporate tax help before the first return is filed.
• Owners paid company costs personally: see startup costs paid personally and a partner who paid LLC expenses personally, and get bookkeeping help to record them before the first return.
• A second owner joined during the year: the return type can change on that date; see partner capital accounts and setting up books for a new LLC, and get corporate tax help.
• A corporation issued founder stock: see founder shares that vest and setting up books for a new corporation, and get startup tax help before the first return.
• An owner is not a US citizen or resident: see what your preparer needs for a foreign-owned corporation or, for a single-member LLC, foreign-owned single-member LLC filing, and get cross-border tax help.
• The books are already behind: see catching up on overdue books and get bookkeeping help.
• You are not sure you need an accountant, or what one or a formation service costs: see bookkeeper, accountant or CPA, small business accountant cost and who should form your LLC.