Must File LLC if no activity?

[Super Mom]

Ok, this is a bookkeeping client that went to the UK and I haven't heard from in 3-4 years. I checked with the SOS and they have not filed state annual reports for 3 years and have been administratively dissolved, I know how to fix that and have them restated, but don't no about taking them back on. They CLAIM they have had no activity and want to know if they must file. I know the SOS is required, what about a 1065 if there was no activity, and does it matter that they are in the UK? Thanks!!

[Super Mom]

Also, I THINK these people that were partners got divorced, and the email was signed by a name I don't know and am assuming is a new partner. Would that matter on the 1065 level?

[Super Mom]

I'm saying THINK and ASSUME because I have not decided about whether or not to answer this email. I guess the fact that I'm suspicious should answer my questions, but this was a nice person that I would like to help out as long as I don't have to sign any 1065's.

[spanel]

I'm saying THINK and ASSUME because I have not decided about whether or not to answer this email. I guess the fact that I'm suspicious should answer my questions, but this was a nice person that I would like to help out as long as I don't have to sign any 1065's.

Yes they need to file 1065's. There will also be substantial penalties for not filing on time. I believe $195/partner/per month its late.

Chris

[TaxGuyBill]

From the 1065 Instructions:


Who Must File
Domestic Partnerships

Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

https://www.irs.gov/instructions/i1065/ch01.html#d0e140

[TAXNJ]

Yes they need to file 1065's. There will also be substantial penalties for not filing on time. I believe $195/partner/per month its late.

Chris

See TaxGuy Bill post. Do you agree with the post?

[Super Mom]

Yes they need to file 1065's. There will also be substantial penalties for not filing on time. I believe $195/partner/per month its late.

Chris

Now I'm thoroughly confused, the instructions for the 1065 per IRS state:

"Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

Entities formed as LLCs that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic partnerships. "

[spanel]

Now I'm thoroughly confused, the instructions for the 1065 per IRS state:

"Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

Entities formed as LLCs that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic partnerships. "

Check with your state as far as its filing requirements as well.

Chris

[TAXNJ]

Now I'm thoroughly confused, the instructions for the 1065 per IRS state:

"Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

Entities formed as LLCs that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic partnerships. "

Ask the reply poster that said "yes" to provide the basis for the "yes" answer if that led to your confusion.

[taxea]

Was the company actually desolved? If so, get the date and send a letter explaining the circumstances.

[Burke]

It seems pretty clear to me that no federal tax return needs to be filed if it had NO INCOME and NO EXPENSES during the time of non-filing. An LLC treated as a partnership comes under the partnership rules. Reinstating the LLC with the state authorities is a separate matter as well as any changes in the partnership ownership.

[taxea]

It seems pretty clear to me that no federal tax return needs to be filed if it had NO INCOME and NO EXPENSES during the time of non-filing. An LLC treated as a partnership comes under the partnership rules. Reinstating the LLC with the state authorities is a separate matter as well as any changes in the partnership ownership.

I have had client receive IRS letter asking for filing. For this reason I recommend notifying the State and IRS that the EIN/business has either been disolved or is currently in deactivated status.

[Burke]

Probably a good idea; the IRS has no way of knowing whether the partnership had income or not, unless they received 1099's or some other reporting documents which would certainly generate some type of correspondence.

[JohnH]

Ok, this is a bookkeeping client that went to the UK and I haven't heard from in 3-4 years. I checked with the SOS and they have not filed state annual reports for 3 years and have been administratively dissolved, I know how to fix that and have them restated, but don't no about taking them back on. They CLAIM they have had no activity and want to know if they must file. I know the SOS is required, what about a 1065 if there was no activity, and does it matter that they are in the UK? Thanks!!

Going completely off the rails into paranoia territory here (disclaimer).

Why would they suddenly ask these questions out of the blue? I think you should very cautious about doing any work for them at this stage, or even answering questions. You mentioned later there was possibly a divorce in the picture. To get really paranoid, what if one party or the other opened an account or accounts in the name of the LLC in an attempt to temporarily hide assets from the other spouse? Or perhaps the other party is suspicious that something of this nature may have taken place and they're trying to elicit leads from you. Not only would that be a mess, but think about the implications of a missed FATCA deadline.

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