| The Members of an LLC organized as a C corporation have the benefit of paying taxes only on amounts received as either Dividends or Salary.
If no distributions are made either through Bonuses received as salary or dividend distribution, the Corporation would be simply accumulating retained earnings, and be subject to income tax based on net profits at the applicable Corporate tax rate.
So, you appear to be correct in that no member would be pay taxes if no distributions are paid, provided the LLC would be paying the taxes. Still, this treatment appears to be subjecting the LLC income to double taxation! | 
