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Old 01-09-2013, 01:33 PM
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Never filed a Tax Return for LLC

Hi,

We formed and registered an LLC Corporation in Florida back in 2008, with foreign registration in 3 other States, for the intention of investing in Real Estate. It made no income for the first 2 years (had a few expenses though). Bought and sold a property in 2010 and then 2011.

My question is this: The company has never filed a tax return, can you please suggest what I need to do to get in compliance? is there a recommended tax software i could use? Where do I start?

Thanks

DW


Last edited by WPILLC : 01-09-2013 at 05:40 PM.


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Old 01-10-2013, 09:12 AM
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“My question is this: The company has never filed a tax return, can you please suggest what I need to do to get in compliance?”----------> Basically, the IRS imposes separate tax return filing requirements on different types of business organizations. However, the tax filing rules that apply to a LLC, depend on how the members choose to treat the business for federal income tax purposes. Some organizations must file a tax return during tax years when there is no business activity, while others must meet minimum taxable income requirements.I assume that yur LLC is a partnership, I mean MMLLC, then, LLC that you designate as a partnership for tax purposes must provide the IRS with an informational tax return on Form 1065 and a Sch K-1 attachment for each LLC member. This filing requirement remains effective for any tax year the LLC has no business activity or income. When you prepare the return, you can simply enter zeroes for revenue and expenses. Unless you file Form 7004 for an automatic six-month extension of time to file, the IRS will impose an $89 ,I geuss, per-partner penalty for each month you file the return after its due date. Sch K-1 reports each member’s share of partnership profits and losses. The IRS will impose an additional penalty of $50 per month for each K-1 you fail to attach to the return by the due date. So, you still file with $0 income but you're not 'late' since you don't owe the IRS anything. As you didn't elect to be taxed as a corp you don't need to do anything at the Federal level. However it may be different with the state. Most states treat LLCs as corps and require either a corp or special LLC return every year, often along with minimum state franchise fees. Hopefully you don't live in NY or CA where the fee can run as high as $800.I guess you need to contact the IRS and those states Dept of Rev for more info in detail.
“ is there a recommended tax software i could use? Where do I start?”--------------->You need to contact the IRS/State Dept of Rev for more accurate info in detail before trying to file your late returns, OK??



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Old 01-10-2013, 06:32 PM
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Quote:
Originally Posted by Wnhough View Post
“My question is this: The company has never filed a tax return, can you please suggest what I need to do to get in compliance?”----------> Basically, the IRS imposes separate tax return filing requirements on different types of business organizations. However, the tax filing rules that apply to a LLC, depend on how the members choose to treat the business for federal income tax purposes. Some organizations must file a tax return during tax years when there is no business activity, while others must meet minimum taxable income requirements.I assume that yur LLC is a partnership, I mean MMLLC, then, LLC that you designate as a partnership for tax purposes must provide the IRS with an informational tax return on Form 1065 and a Sch K-1 attachment for each LLC member. This filing requirement remains effective for any tax year the LLC has no business activity or income. When you prepare the return, you can simply enter zeroes for revenue and expenses. Unless you file Form 7004 for an automatic six-month extension of time to file, the IRS will impose an $89 ,I geuss, per-partner penalty for each month you file the return after its due date. Sch K-1 reports each member’s share of partnership profits and losses. The IRS will impose an additional penalty of $50 per month for each K-1 you fail to attach to the return by the due date. So, you still file with $0 income but you're not 'late' since you don't owe the IRS anything. As you didn't elect to be taxed as a corp you don't need to do anything at the Federal level. However it may be different with the state. Most states treat LLCs as corps and require either a corp or special LLC return every year, often along with minimum state franchise fees. Hopefully you don't live in NY or CA where the fee can run as high as $800.I guess you need to contact the IRS and those states Dept of Rev for more info in detail.
“ is there a recommended tax software i could use? Where do I start?”--------------->You need to contact the IRS/State Dept of Rev for more accurate info in detail before trying to file your late returns, OK??
Thanks, I appreciate the info and help. It is going to file as a C corp, does this change any of the above info? Even though the LLC has only made two real estate transactions, it still has not made a profit as yet.
I'm a bit concerned that it may have some penalties or something for not filing yet. The reason it has not filed a return as yet is because, I, as the main director had been sick for a while and now my health is good I want to sort it out.

Thanks again for your assistance

much appreciated

DW



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Old 01-11-2013, 01:04 AM
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“It is going to file as a C corp, does this change any of the above info? Even though the LLC has only made two real estate transactions, it still has not made a profit as yet. “------>C Corps pay their own income tax and when an LLC makes an election to be treated as a C Corp, owners can eliminate the risk of accruing high self-employment tax bills. UNLESS the corp has been dissolved with the State and has filed a final return you are required to file annual returns until this is done.You would owe no federal income tax but are still required to file a return.( Some corporation may be inactive and have no income or expenses. I have seen cases where the owner chooses to keep the company around for future use. If this is the case, you will need to file form 1120, plus the state return(s), I guess, your corp is incorporated in, by the filing due date. Most states do have an annual fee to pay, even if the company is inactive. This will generate an expense for the company each year. )You would be required to file a return for the states where the corp operates as a foreign corp. For example, CA state, "foreign corps," those chartered in other states, as well domestic corporations have to pay at least $800 to keep the corporate charter alive. You will need to pay your states annual filing fee. So, , since the biz is a C-Corp, you at least have to file an inactive return with the IRS. As said, essentially it'd be all $0s. You have to contact Dept of Rev of other states you are in for their specific guidelines. For instance, assume that you are a foreign Corp in DE, then, if you have not filed your annual DE Corporate franchise tax for certain number of years defined in the States corp act, your corp has been dissolved by the DE Secretary of State and is no longer in existance. I have heard that the state of Nevada does not administratively dissolve inactive corps, and thus, any fees and back taxes accrue until action is taken.If the corp had no operations, no income, and no expenses it will not have a tax liability. Should the IRS send you a notice of failure to file, you need only to file a return for that year disclosing zero revenue and zero expense. Since all penalties and interest are computed on the basis of the tax liability you will not be hit with a bill for either tax, penalty or interest.




“I'm a bit concerned that it may have some penalties or something for not filing yet. The reason it has not filed a return as yet is because, I, as the main director had been sick for a while and now my health is good I want to sort it out.”-->As mentioned above.



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