past due form 1065 for a dissolved LLC with no income.

[Taxery]

Per IRS' form 1065 instructions, if an LLC did not receive any income and did not incur any expenditures treated as deductions, there is no need to file form 1065. As far as I see this is what the IRS says in her instructions.

 

An LLC with two members was active a few years ago for about 11 months in one calendar year. That is, it was started and dissolved the same year. They absolutely had no income and no expenses deducted anywhere. Form 1065 income and deductions were to be all zero. However, they did not file any form 1065 for this LLC. The LLC is now completely dissolved. Members are trying to figure out whether they were expected to file a final form 1065 even though they had zero income and zero expenses and deductions in the lifetime of the LLC. If the answer is yes, are they facing any late filing penalty for filing a past year 1065 late? On the other hand, the LLC existed less than a year, they did not file an initial return either.

[Abby Normal]

If you get a notice from the IRS, just send them an explanation.

[easytax]

Same premise but my clients LLC did not "dissolve", just never did any real business and what was done was within a few months, all in one year.

 

Setup in 2010, bought store fixtures, stock, not sure they sold anything (still awaiting docs to review); just quit doing business (2 friends with an idea).

 

Just one LLC person still around (my client) and wants to be clear of this.   Two people signed LLC Pennsylvania setup forms without knowledge of "how" they really wanted to do LLC --- just thought LLC was easiest way to go.   With two signatures - on setup, I believe LLC-1065 is best (how I wish it were LLC-sch. C --- I hate 1065's (don't know them, never advised them, etc., never did one)). Will only have client to sign whatever is done. Other person whereabouts unknown.

 

My client has done all personal taxes, etc. for years involved but without mentioning LLC. I will probably amend 1040 for 2010 but am curious as to will the 2011 and beyond need amending since LLC had no income or expenses -- client willing to "eat" dissolving expenses in/for 2015, so no expense in 2015 either (unless there has to be).     AGAIN -- 1065's -- I have never done, so is there a big difference from sch. C and/or corp's (mostly sub S)?

 

 

My idea is to file 2010 with appropriate numbers (LLC 1065), 2011 onward to now as zero's and dissolve in 2015. ----- Any other/better ideas appreciated.

 

Also, any idea on penalties for not filing, late filing, etc. or is all probably based on any tax owed and due?

[Lion EA]

A 1065 is just a Schedule C with a balance sheet.  In fact, BS probably not required, but you'll need it to dissolve anyway.  Coming in from the beginning with every thing zero, knowing what they bought, invested, did, and closing out with zero, sounds like a great way to learn about 1065s.  Yeah, that' as bit simple.  But, getting a partnership from the beginning is easier than coming in after a few years of DIY or a preparer who retired or died.  You can do it.

Edited March 2, 2015 by Lion EA

[Taxery]

Dissolving primarily happens at state level as the LLC is a state entity to begin with, right? At federal level, the only move needed is to file final return in 1065 for a no-employee LLC. But what if there is no income and expense to file in 1065? Is a final return filing still needed? 1065 instructions says if there is no income and expense, no 1065 needs to be filed. CouLd final return be an exception? Btw, in my case, there is no initial return filed either as the LLC was started an dissolved in the same year.

[jklcpa]

If there was no activity at all and no returns ever filed, I don't believe there is any requirement to file a final return. There is nothing to report.  If the LLC had an EIN that has gone unused, the IRS will eventually make it inactive and reuse the number at some point in the future.

 

I am curious about what these LLC members were doing for the 11 months that you said they were active in the LLC.  What exactly were they doing for the 11 months?

[Taxery]

They did try to set the business in motion with no success. The business just did not pick up. The business had an EIN#. Maybe they should ask IRS to deactivate it?

Edited March 2, 2015 by Taxery

[Richcpaman]

File a 1065 with zeros, and marked final.

 

Charge them $200 or whatever to do it.

 

They can deduct the $200 on the Sch E page 2.

 

Rich

[Taxery]

File a 1065 with zeros, and marked final.

 

One challenge is that LLC is already dissolved in 2013 and does not have a business address anymore. Shall I enter member's home address?

[SFA]

Be careful here. Even if there were no sales, there may still have been assets purchased or contributed to the partnership that need to be sorted out as to what each partner/member received at dissolution.

 

There can be potentially a transfer of wealth from one individual to another, using the partnership entity to "launder" the transaction.

 

I would prepare a final return and present a balance sheet with no assets and a reconciliation of who and what was contributed and to whom assets (if any) were distributed.

 

I am not saying in any way that is the case in your situation, but it is a reason to dig deeper and prepare an accurate final return.