Opened a partnership LLC but never had income

[hamwiabood]

Hey, I am in need of guidance. I opened a partnership LLC (2 members) in november 2023. we never filed any tax form or anything. we also have 0 income and 0 expenses so we did nothing with the LLC. i want to close it and I heard from someone that i should file my late taxes for the past year, gonna cost about 500$ and then dissolute the company for 150$ and file taxes for this year in the next year also 500$. any way to cut down all these expenses or alternative method? Thanks

[tagteam]

See https://www.irs.gov/instructions/i1065#en_US_2023_publink11392vd0e555

The LLC (partnership) is not required to file a federal income tax return (Form 1065), if it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

[Opus 17]

For IRS purposes, you are only required to file a tax return (in this case, a partnership return) if your business is ongoing and active.  If you opened the business, looked for customers, and the business was ongoing with a profit motive, you might be able to file a return to report your expenses, and maybe get a deduction on your regular taxes, even if you never got paid by any customers.

However, if the business was never active (an ongoing trade or business), then you would not be required to file a federal return either for 2023 or 2024.

Also, if you applied for a federal EIN for the business, you do not have to cancel it officially, but you can't use it for any other business (if you start a new business some time in the future, you need to apply for a new EIN).  If you never used the EIN, you have the option of canceling it, but this is not required.

https://www.irs.gov/businesses/small-businesses-self-employed/canceling-an-ein-closing-your-account

However, this is all separate from any state requirements.  A state may require you to pay a registration fee, annual fees, and/or a dissolution fee, for your LLC.  If you fail to follow state rules, you might have problems in the future if you try to start another business.  

[hamwiabood]

So based on my situation, no income and no transaction occurred with/through the LLC, I can only file a LLC dissolution form to my state (wyoming and pay 60$ fee) and not worry about the IRS, because a tax agent told me that I need to file these taxes even with 0 income, I also have my EIN that is connected to the LLC. Im sorry for asking many question but im lost and need guidance, really appreciate your effort. 

[Opus 17]

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@hamwiabood wrote:

So based on my situation, no income and no transaction occurred with/through the LLC, I can only file a LLC dissolution form to my state (wyoming and pay 60$ fee) and not worry about the IRS, because a tax agent told me that I need to file these taxes even with 0 income, I also have my EIN that is connected to the LLC. Im sorry for asking many question but im lost and need guidance, really appreciate your effort. 

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Correct.  If the business was never an ongoing concern, and you have no income and no expenses to report, you don't need to file a tax return, and formally closing the EIN is optional.  You are only required to deal with any state paperwork required to dissolve the LLC. 

[hamwiabood]

I forgot to mention that im not a us-resident so the laws may be different (that what a tax agent told me)

[tagteam]

@hamwiabood 

It makes no difference; it is a domestic partnership (LLC) since it was organized under the laws of Wyoming.

[hamwiabood]

can you message me, I tried sending you a message

[hamwiabood]

The IRS says something about foreign partner; I live in canada and my partner in Turkey.
Item H1. Domestic/Foreign Partner
Check the foreign partner box if the partner is a nonresident alien individual, foreign partnership, foreign corporation, foreign estate, foreign trust, or foreign government. Otherwise, check the domestic partner bo

[tagteam]

Foreign Partnership

A foreign partnership is a partnership that isn't created or organized in the United States or under the law of the United States or of any state. In certain instances, a partnership created or organized in the United States can be treated as a foreign partnership. See, for example, Regulations section 1.958-1(d)(1).

In addition, if a domestic section 721(c) partnership is formed after January 17, 2017, and the gain deferral method is applied, then a U.S. transferor must treat the section 721(c) partnership as a foreign partnership and file a Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, with respect to the partnership. See Form 8865 and its instructions. See also Regulations section 1.721(c)-6(b)(4).