An LLC member who actively participates in the business owes SECA tax, IRS says privately. A restaurant franchisee contributed the stores to an LLC owned by him, his wife and a trust. He’s the president and CEO, runs its operations and conducts its day-to-day business affairs. He claimed that his interest in the LLC qualifies as a limited partner interest, exempting him from self-employment tax on his share of the firm’s income. IRS disagreed because he wasn’t a mere investor. It’s irrelevant that the business is capital-intensive, that the LLC has lots of employees and that the member also received guaranteed payments for performing services.