Entities that are: Sole Proprietors, Partnerships, Limited Liability Company and/ or  Tax Partnerships (LLC/LLP), Corporation, Sub-chapter S Corporation
Question: For IRS purposes, how do I classify a limited liability company?   Is it a sole proprietorship?, partnership ? or a corporation?
Answer: A limited liability company (LLC) is an entity that for tax purposes:

Was formed under state law by filing articles of organization as an LLC.
Was formed where none of the members of an LLC are personally liable for its debts.
Must be classified for Federal income tax purposes as if it were a sole proprietorship (referred to as an entity disregarded as separate from its owner), a partnership, or a corporation. However, if the LLC has employees, for employment tax purposes the LLC will be treated as a corporation.
If the Limited Liability Corporation has:
Only one owner, (see Publication 555, on community property states), it will automatically be treated as if it were a sole proprietorship (a disregarded entity), unless an election is made for it to be treated as a corporation.
Has two or more owners, it will automatically be treated as a partnership unless an election is made for it to be treated as a corporation.
If the LLC does not make a classification election, a default classification of disregarded entity (single-member LLC) or partnership (multi-member LLC) will apply. The election referred to is made using the Form 8832 (PDF), Entity Classification Election. If a taxpayer does not file Form 8832 (PDF), a default classification will apply.
Legal Counsel should be involved with these decisions. Call the attorney’s at Fresh Start Tax.