What should an individual business owner do to structure an L.L.C.?
Real Estate Attorney
There are two issues that need to be separated here: the tax/IRS issues and the legal formation/structuring. With respect to the IRS, generally speaking, if you are a 100% sole member/manager of an LLC, and you elect not to be treated as a corporation, then the IRS will treat the LLC as a disregarded entity, meaning that you will be taxed as a sole proprietor. The LLC will not be taxed separately. I think this is what you are referring to in your question when you say "not accepted by the IRS". If you do want the entity to be taxed as a corporation, then you should speak with a tax professional regarding the tax implications of doing so.
Many individuals set up an LLC to be shielded from personal liability for business debts and claims. However, if the single-member of an LLC fails to treat the LLC as a separate business, then a court may decide that the LLC doesn't exist and hold the member personally liable. In order to avoid this scenario, having a written Operating Agreement isn't generally enough. You must keep LLC business separate from personal matters, which means having a separate bank account for the LLC, adequately funding the LLC, and entering into contracts under the LLC.
I suggest that you consult with both a tax professional and a business attorney to guide you through the entity formation process and to ensure that it is structured properly.
Ms. Ginossi gives a great analytic response. The IRS does permit single member LLCs formed in California.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
Intellectual Property Law Attorney
Ms. Gionossi gives a great response. Single member LLC's in California are the most common. You are probably confused because the IRS treats them as "pass through" entities. All that means is that the LLC will not be taxed. You will be taxed individually for the income of the LLC. Essentially, all of the revenue from the LLC passes through directly to you in terms of taxable liability. This is one of the advantages of a single member LLC because you are able to deduct any business losses or costs on your personal income return. Talk to a lawyer to get it all set up right and good luck on your new business venture!