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Double Trouble

A new IRS proposal could mean more red tape--and higher taxes--for your partnership.

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This story appears in the September 1997 issue of Entrepreneur. Subscribe »

If your business is organized as a limited liability company (LLC) or a limited partnership, the IRS may have some unpleasant news for you. In a move that is already creating an uproar in the small-business community, the IRS is in the midst of issuing a new regulation targeted at these two types of partnerships.

The regulation will not only mean higher taxes, say critics, but a host of burdensome new record-keeping and information-collection requirements. Slated to take effect next year, the regulation is described by critics as a "stealth" tax increase.

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