Yes, the IRS can pursue tax liabilities owed by a Limited Liability Company (LLC). However, the extent to which the IRS can collect on those liabilities depends on the structure of the LLC and the circumstances surrounding the tax debt.

Here’s a breakdown…

1. Pass-Through Taxation – Most LLCs are treated as pass-through entities for tax purposes, meaning that the income, deductions, credits, and liabilities of the business “pass through” to the individual owners’ tax returns. In this case, the IRS typically collects unpaid taxes from the individual owners rather than directly from the LLC itself.
2. Member Liability – In a single-member LLC or a multi-member LLC where all members are actively involved in the management of the business, members are generally personally liable for the tax debts of the LLC. This means that the IRS can pursue collection actions against the individual members to satisfy the LLC’s tax liabilities.
3. Limited Liability Protection – In a multi-member LLC where one or more members are passive investors and do not participate in the management of the business, those passive members typically have limited liability protection. This means that their personal assets are generally shielded from the LLC’s debts and obligations, including tax liabilities.
4. Piercing the Corporate Veil – In certain circumstances, the IRS may attempt to “pierce the corporate veil” and hold individual members personally liable for the tax debts of the LLC. This typically occurs when there is evidence of fraud, commingling of personal and business finances, or failure to observe corporate formalities.
5. LLC Assets – The IRS may also attempt to collect unpaid taxes directly from the assets of the LLC, such as bank accounts, real estate, equipment, or inventory. However, if the LLC does not have sufficient assets to satisfy the tax debt, the IRS may pursue collection actions against the individual members.

While LLCs provide limited liability protection to their members, the IRS has various mechanisms for collecting unpaid taxes owed by LLCs, including pursuing individual members, seizing assets, or seeking to pierce the corporate veil in cases of fraud or misconduct. It’s essential for LLC members to ensure compliance with tax laws and regulations and address any tax liabilities promptly to avoid potential legal and financial consequences. Consulting with a tax professional or legal advisor can help navigate complex tax issues and mitigate risks associated with IRS enforcement actions.