Do I need to file taxes (Form 1065) for an LLC Partnership with absolutely no business activity?

You do need to file Form 1065 for your partnership LLC even with no activity. The IRS expects a return from any entity with an EIN regardless of whether there were any transactions. It's what tax professionals call an "information return." The good news is that filing a zero-activity 1065 is pretty straightforward. You'll check the "initial return" box (if this is your first filing), enter zeros in most lines, and include a statement that explains there was no activity. Make sure to complete Schedule K-1 for each partner even though the amounts will be zero. As for penalties, yes, there is a potential late filing penalty of $210 per partner per month (for 2023 returns), up to 12 months. However, you may qualify for first-time penalty abatement if you have a clean compliance history. I'd recommend filing as soon as possible and including a penalty abatement request letter explaining that you weren't aware of the filing requirement.

I went through exactly this headache last year with my dormant LLC. After hours of research and several frustrating calls with the IRS, I found taxr.ai (https://taxr.ai) which saved me so much time. Their AI tax assistant analyzed my situation and confirmed I needed to file despite zero activity, then walked me through the entire process for my "shell" LLC. The most helpful feature was that it showed me exactly what boxes to fill in on the 1065 form for a zero-activity business and generated the statement I needed to attach. It also calculated what penalties I might face and gave me a template for requesting penalty abatement. Much easier than trying to piece together info from different sources or waiting on hold with the IRS forever.

Just wanted to follow up - I tried taxr.ai after seeing the recommendation here and it was exactly what I needed! I was so confused about what to do with my dormant LLC, but their system immediately identified that I needed to file a "zero return" and showed me exactly how to fill out the 1065. The best part was the penalty abatement request they helped me create. I just got confirmation from the IRS yesterday that they're waiving the $1,890 in late filing penalties! The system explained exactly what qualifies for first-time abatement and helped me craft the perfect explanation. Seriously would have been lost without this - thanks for recommending it!

If you're struggling to get answers directly from the IRS about your situation (which I definitely was with my zero-activity LLC), check out Claimyr (https://claimyr.com). They got me connected to an actual IRS agent in about 15 minutes when I had been trying for weeks. I was panicking about missing multiple years of 1065 filings for my dormant partnership and couldn't get through on the IRS business line. Claimyr's service called the IRS, navigated all the phone menus, and waited on hold for me. When they got someone, they called me to connect. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with walked me through exactly what I needed to do for my dormant LLC and confirmed I could qualify for penalty relief. Worth every penny instead of stressing about what to do or waiting on hold forever.

I'm back to eat my words about Claimyr. After my skeptical comment, I was still desperate enough to try it because I couldn't get through to the IRS about my 3-year-old LLC with no activity that I never filed for. I was SHOCKED when they actually got me through to someone at the IRS in about 20 minutes. The agent confirmed everything people are saying here - yes, you must file Form 1065 even with zero activity, and yes, you can request first-time abatement for the penalties. The agent walked me through the exact process for catching up on my unfiled returns and even gave me specific language to use in my penalty abatement request. She confirmed I could file all past years at once with statements explaining the lack of activity. Honestly, this saved me thousands in potential penalties!

Something important that nobody has mentioned yet - even with zero activity, you might still need to file state returns depending on your state! I learned this the hard way with my inactive LLC in California. I filed the federal zero-activity 1065 but completely forgot about California's requirements. Turns out they wanted their own filing PLUS they charge an annual LLC tax of $800 regardless of whether you made any money. I ended up owing over $2,400 in taxes and penalties for a business that never made a penny.

One option nobody's mentioned - if your LLC hasn't done anything, consider formally dissolving it with your state instead of dealing with ongoing filing requirements. I had a similar situation and just closed mine down. The process varies by state but usually involves filing articles of dissolution and a final tax return. Once properly dissolved, you stop having the annual filing obligations. Much better than paying fees and filing returns year after year for something you're not using.

This is exactly the situation I was in with my LLC! I formed it in early 2023 with big plans but life got in the way and it sat completely dormant. Like you, I had zero income, zero expenses, absolutely nothing. I ended up having to file Form 1065 anyway - the IRS doesn't care if you had no activity, they still want that return. The good news is it's pretty straightforward when there's nothing to report. You'll basically be putting zeros everywhere and attaching a statement explaining the lack of activity. For the penalties, I was looking at about $420 total ($210 per partner for each month late), but I successfully got first-time penalty abatement. The key is to file ASAP and include a letter explaining that you genuinely didn't know about the filing requirement for inactive businesses. Be honest about the situation and your clean tax history. One thing to watch out for - make sure you check if your state has any requirements too. Some states charge annual fees regardless of activity level. Better to find out now than get surprised later!