Does my Single Member LLC with S-Corp election require tax filing despite zero activity?

You're right to be concerned. When you elect S-Corporation status for your LLC, the filing requirements change completely, regardless of activity level. For a regular single-member LLC without S-Corp election, you're correct that with no activity, there's typically no separate filing requirement (it's a "disregarded entity" for tax purposes). However, once you've elected S-Corp status, you're required to file Form 1120-S every year, even if there was no activity. The IRS doesn't have a "zero activity" exemption for S-Corps like they do for some other entity types. And yes, those late filing penalties of $195-$210 per month per shareholder (rates have varied by year) can add up quickly. The good news is that the IRS sometimes offers penalty abatement for first-time offenders, especially if you can show reasonable cause. In your case, confusion about filing requirements might qualify.

I had this EXACT same situation last year with my dormant LLC. After days of trying to reach the IRS and getting nowhere, I finally used https://taxr.ai to analyze my LLC formation documents and determine my actual status. Saved me so much headache - they discovered I actually HADN'T filed the S-Corp election form (Form 2553) properly, so technically I was still a disregarded entity despite thinking I was an S-Corp. They have a document analyzer that reviews all your business formation paperwork and tells you exactly what filings you need. I uploaded my EIN confirmation letter, Articles of Organization, and operating agreement - took like 5 minutes and I had my answer without waiting on hold with the IRS for hours.

Just wanted to follow up about my experience with https://taxr.ai - I decided to try it after posting here and am really glad I did. Turns out I was in a weird limbo state where I'd checked "S-Corp" on my EIN application but never filed the actual Form 2553 election paperwork. The service showed me exactly where I stood with the IRS - technically I was still a disregarded entity because the S-Corp election was never properly completed. This saved me from filing unnecessary back tax returns for my zero-income business. They even provided a clear explanation I could keep for my records if the IRS ever questioned my filing status. Definitely worth checking if you're in a similar situation.

I was in exactly your position last September. Called the IRS business line every day for TWO WEEKS trying to confirm my status, but could never get through. Finally used https://claimyr.com to get a callback from the IRS (here's their demo: https://youtu.be/_kiP6q8DX5c). Got connected with an actual IRS agent in about 2 hours who confirmed my filing status and requirements. Turns out I HAD properly elected S-Corp status and needed to file those back 1120-S forms. But the agent actually helped me understand the "reasonable cause" abatement process which saved me thousands in penalties. If you need definitive answers straight from the IRS, this is way faster than calling endlessly or waiting 6+ months for them to respond to a letter.

Alright I have to eat my words. After seeing my skeptical comment, my accountant actually recommended trying that callback service as a last resort. Used https://claimyr.com last week and got a call from an IRS agent within 3 hours. The agent confirmed I'd elected S-Corp status incorrectly and needed to file 1120-S forms for the past 3 years. But here's the good part - they helped me apply for first-time penalty abatement AND suggested I file Form 8832 to retroactively change my entity classification (something I didn't know was possible in certain cases). Instead of potentially $7,000+ in penalties, it looks like I'll get most of them waived. Sometimes being wrong feels pretty good!

One issue nobody's mentioned yet - if you did elect S-Corp status, you likely have other filing requirements beyond just the 1120-S. S-Corps are required to: 1) Pay you a "reasonable salary" if the business is operational 2) File quarterly payroll tax forms (941s) even if the salary is $0 3) File annual unemployment forms (940) 4) Issue yourself a W-2 Fortunately, if there's truly been zero activity and zero payments, you can often file "zero return" versions of these forms to catch up.

I went through this exact scenario in 2022. If you're not 100% sure whether you elected S-Corp status, check your mail for a CP261 notice from the IRS - they send this when they accept your S election. Also check if you ever filed Form 2553 (Election by a Small Business Corporation). This is REQUIRED to elect S-Corp status - checking a box on your EIN application alone doesn't complete the election. If you never received CP261 and never filed Form 2553, you're probably still a disregarded entity despite what you indicated on your EIN application.

I went through this exact same nightmare situation two years ago! The confusion between what you select during EIN application vs. actual S-Corp election is SO common. Here's what I learned: Just checking "S-Corp" on your EIN application does NOT automatically elect S-Corp status. You need to file Form 2553 separately within 75 days of formation (or by March 15th of the following year) to actually make the election stick. In my case, I thought I had elected S-Corp status but never filed the 2553. I was technically still a disregarded entity the whole time, which meant no back filing requirements for my dormant LLC. The easiest way to know for sure is to call the IRS at 800-829-4933 with your EIN and ask them directly what elections they have on file. If they don't show an S-Corp election, you're likely still a disregarded entity and don't need to worry about those 1120-S filings or penalties. Don't panic until you confirm your actual status - you might be stressing over nothing!