I am a passive investor/partner in LLC. I got the Schedule K1 form but the business owner is not sending funds for the amount in K1. Can I not mention the K1 amount since I didn’t receive that money? Will I get an audit from IRS if I don’t mention this amount in tax filings ?
As an investor in a pass-through entity, you are responsible for reporting all income, loss, gain, etc. regardless of whether you receive any distributions.
Typically a pass-through entity makes a distribution to the investors to cover the tax implications.
Most multi-member LLC's have operating agreements and this agreement will generally have a section that speaks to distributions. You should have been provided a copy.
Whether or not you receive any distributions has no impact on your tax filing. The IRS is only concerned that you properly report your K-1 amounts.