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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121313  
Subject: Re: sole proprietorship & deductions Date: 5/6/2004 7:54 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...

No, the issue is entirely about answering the question asked. Although this is a tax board, not all the questions are about taxes. This is one of those "off topic" questions. The issue of registering a DBA in a new state is entirely a legal question.

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.

No, the IRS does not care at all what names you use as a DBA on Schedule C. The DBA is included only to help distinguish between multiple Schedule C's. The only entity (entities) the IRS cares about are the ones whose SSNs are on page 1.

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?


Actually, I made a mistake here. If you apply for an EIN, it is issued in your name (as the legal entity), not the DBAs. Again, you can have multiple sole proprietorships using the same EIN. If you don't believe me, read the instructions for Form SS-4. Even if what I wrote originally were correct, you continue to confuse cause and effect. You seem to be implying that the IRS has some control over the name you do business under. The choice of business name comes first. All the IRS wants is that the name you list on Schedule C match the one you've already chosen to do business under. If you decide to run a "get rich quick" scheme and call your business "The Motley Fool", the IRS won't care. The folks who run this board will certainly care. Your state/local government may also care. They may take action to prevent you from using the name, but their action won't be based on your entering "The Motley Fool" as a DBA on your tax return.

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.


Please stop confusing taxes and law. The original question was "do I have to register my DBA in a new state?", not how will I complete my tax return. My answer (above) addressed the legal issue. I ignored the tax issue entirely.

Ira
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