In an internal legal memorandum (ILM 201447025), the IRS concluded that payments made to a limited liability company (LLC) that is not taxed as a corporation are subject to the information reporting requirements under Section 6041.

Section 6041 requires that all persons engaged in a trade or business who in the course of that trade or business make payments of $600 or more to another person, must report the payments to the IRS and the person receiving the payments. These payments are typically reported on one of the various Forms 1099. As an exception, payments made to a corporation are not subject to these reporting requirements.

An LLC is taxed by default as a partnership (if it has more than one member) or a disregarded entity (if it has one member). An LLC is taxed as a corporation if it makes an election on Form 8832 to be taxed as a corporation. The IRS concluded in the ILM that LLCs that have not made this election are not treated as corporations, and payments made to those LLCs are subject to the Section 6041 information reporting requirements.