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Author: Littlechap Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121319  
Subject: Re: sole proprietorship & deductions Date: 5/6/2004 2:56 AM
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"Your county government may have its own regulations, but I think most municipalities simply follow the lead of the IRS, so whatever specs or restrictions the IRS places on the name you use, you can probably do the same thing on a local basis."

Sorry, but this is completely backwards. The IRS puts no limit on the name you use to conduct your business.


My goodness, what is with the people on this board? So anxious to find something to disagree over. I suppose that's what comes from thinking about taxes all day long. I can relate to that, but still...

What the IRS cares about is that they can match up the entity identified on the Schedule C with the entity on the 1040. You can use other words if you don't like "specs or restrictions" but it is fair to say that the IRS is highly interested in having data on those forms reflect the real world as accurately as possible.

I really do not want to spend all night typing in scenarios whereby the use of a fictitious name could create confusion, but they exist. If one wanted for some reason to fill in the name section in such a way as to guarantee an audit, I'm sure they could do it. You're correct in suggesting that it's unlikely in Gabe's situation, but when I write such phrasing I do so consciously, to accommodate all possible cases.

If you have payroll, you need a separate tax ID for the business and that has to be issued in your DBA name (or your personal name if that's what you use).

Hm. Now, that is a "restriction," is it not? Goodness sakes. Didn't you just say that the IRS would not place any limits on names on a Sched C?

Gabe made no mention of payroll, which is why I did not bring it up. I assumed that if he had one, he'd be using his EID# instead of his SS# --which is what he said he was using.

On the other hand, the regulation of business registration is completely up to your state, and in some states, local government.

For sole proprietors, my city and state both accept the Federal Schedule C in lieu of their own forms. But again, my phrasing accommodated all possibilities. You are just repeating what I said.

But if you want to find something to disagree with, please, feel free.
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