Do I need to pay taxes on an LLC I never used but now need to dissolve?

What if they did get an EIN? Is there a specific form to notify the IRS about closing the LLC? And do you know if states typically charge back taxes for missed annual reports when dissolving an inactive LLC?

If you obtained an EIN, you don't technically need to cancel it with the IRS, but it's good practice to inform them. You can send a letter to the IRS stating that you're closing the business and no longer using that EIN. Include the EIN, business name, and address in your letter. For state requirements, it varies greatly by location. Some states will require you to catch up on all missed annual reports and fees before allowing dissolution, while others might have a simplified procedure for inactive entities. I'd recommend checking with your state's Secretary of State office or business filing agency. In some cases, if you never filed any annual reports, the state may have already administratively dissolved the LLC, but you'd still want to verify this.

Does this tool work for all states? I'm in California and their LLC fees are insane even for inactive businesses.

How accurate is it though? Like does it actually know all the state-specific requirements? I've heard horror stories about people getting hit with penalties years later.

It definitely works for California - that's actually where I was based too! The tool specifically flagged California's $800 annual franchise tax which I had no idea about, so it saved me from potential headaches. The state-specific guidance was really comprehensive. It pulled up all my obligations for California and even provided links to the exact forms I needed. From what I understand, they maintain a database of requirements for all 50 states that's regularly updated. I haven't had any surprise penalties and it's been over a year now.

Wait, how does that even work? The IRS actually calls you back? That sounds too good to be true considering I've spent my entire life on hold with them.

Yeah right. Nothing gets you through to the IRS faster. This sounds like some kind of scam to me. Has anyone else actually used this and gotten results?

It's not that they call you back - it's that Claimyr navigates the IRS phone system for you and only connects you when an actual human picks up. They basically wait on hold so you don't have to. It works because they have some system that can stay on hold with the IRS while you go about your day, then they call you when they've got an agent on the line. I was skeptical too at first, but it literally saved me hours of frustration. I got connected with an IRS agent who specialized in business entities and got the exact info I needed about dissolving my LLC with zero activity. Not a scam at all - just a smart service that deals with the hold time for you.

Is this true even if you never collected any sales tax? I never made a single sale with my LLC but did register for a sales tax permit just in case.

Unfortunately yes. Many states require you to file returns regardless of whether you collected any tax or made any sales. It's basically their way of confirming you had no activity rather than just assuming it. I was in the exact same boat - got the sales tax permit "just in case" but then never used it. When I tried to dissolve my LLC, I discovered I needed to file all those zero returns first. Some states let you file them all at once, while others made me file each period separately. Check your state's department of revenue website or give them a call to find out your specific requirements.

For a multi-member LLC with no activity, the rules are slightly different than for single-member LLCs. Even with zero activity, the IRS technically requires multi-member LLCs to file Form 1065 (Partnership Return). It's annoying, but you might need to file a return showing zeros for all income and expenses.

Thanks for sharing your experience! $2,000 in back fees sounds brutal for something you never even used. I'm curious - when you contacted your Secretary of State office, were they able to work out any kind of payment plan or penalty reduction since the LLC was genuinely inactive? Also, did you end up having to file all those missed annual reports individually, or was there a streamlined process for catching up on multiple years at once?

That's a really helpful breakdown! I'm dealing with a similar situation and wondering about the administrative dissolution aspect you mentioned. How do you check if your LLC was administratively dissolved? Is there a specific database or website for each state, or is it usually through the Secretary of State's business search portal? I'm hoping mine might have been automatically dissolved since I never filed anything, which could potentially save me from some of those back fees you mentioned.