Inactive LLC - Filing Requirements for Partnership with Zero Activity?

You still need to file a 1065 return even with zero activity. It's a common misconception that no activity means no filing requirement, but the IRS expects a return for any entity with an EIN that hasn't been formally dissolved. The good news is that a "zero return" is pretty straightforward. You'll basically be filing a return showing no income, no expenses, and no distributions. You'll need to complete Form 1065 and Schedule K-1 for each partner, but most lines will be zeros. You definitely don't need to pay $420 for this. You could either use tax software to file it yourself (most major tax software packages can handle partnership returns) or look for a more reasonably priced accountant who understands it's a simple zero activity return.

After dealing with a similar situation last year, I found this amazing tool that saved me a ton of hassle - https://taxr.ai helped me figure out exactly what forms I needed to file for my zero-activity LLC and guided me through the whole process. I had formed an LLC for a real estate venture that got delayed, and was completely lost about what to do for tax season. The tool analyzed my situation, confirmed I needed a 1065 even with zero activity, and then showed me exactly what to put on each line of the form. Seriously made what seemed complicated super simple.

Just wanted to follow up - I ended up trying https://taxr.ai for my inactive LLC situation and it was legitimately helpful. I was surprised that it actually knew about my state's specific LLC tax requirements and minimum franchise fees. It guided me through filing my own zero-activity 1065 without an accountant. The step-by-step instructions were clear enough that I didn't feel like I needed to pay someone $400+ for what ended up being mostly zeros on a form. It even flagged that I needed to file a Schedule B to explain why I had no income despite having an active entity.

If you've tried reaching the IRS to get clarification on filing requirements, you know it's basically impossible to get through. I spent HOURS on hold last year with a similar inactive LLC issue until I found https://claimyr.com which got me connected to an actual IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that yes, I needed to file the 1065 even with zero activity, but also explained the simplified process and which sections I could skip. Having that direct confirmation from the IRS gave me peace of mind that I was doing everything correctly.

I have to admit I was wrong about Claimyr. After my cynical comment I decided to try it for myself when I needed to ask about inactive LLC filing requirements. The service actually worked exactly as described - I got a call back with an IRS agent on the line about 40 minutes after starting the process. The IRS agent confirmed what others have said - you do need to file a 1065 even with zero activity, but it's very straightforward. They also told me about the "final return" option if I wanted to dissolve instead. Saved me hours of hold time and probably a tax preparer fee too.

Don't overcomplicate this - I've had zero-activity LLCs in the past. Just file the 1065 with zeros on almost every line. You mainly just need to complete the entity info at the top, check that it's a partnership, put zeros for income/expenses, and complete a basic K-1 for each partner (again mostly zeros). Most tax software can handle this, even the mid-tier packages. It shouldn't take more than 30 minutes once you understand what you're doing. Definitely not worth $420 for a professional unless you're totally uncomfortable with tax forms.

Remember that even with no activity, there may be state fees you can't avoid. I had an inactive LLC in California and still had to pay the $800 minimum franchise tax despite having literally zero dollars in revenue. It varies by state though, so check your state's requirements.

I went through this exact same situation last year with my inactive LLC! Here's what I learned after making some mistakes initially: First, yes you absolutely need to file the 1065 even with zero activity - the IRS doesn't care that nothing happened with your business. However, $420 is way too much for a zero-activity return. I ended up using FreeTaxUSA's business version which was around $40 and handled the partnership return just fine. The software walked me through each section, and since everything was zeros, it was actually pretty straightforward once I got started. The trickier part was figuring out my state requirements. I'm in Texas so I didn't have franchise tax issues like California, but I still had to file a "No Tax Due" report with the state comptroller. Make sure you research your specific state's requirements because they vary wildly. One tip: when you fill out the K-1 forms for each partner, even though the amounts are all zero, you still need to complete the partner information sections correctly. That's where I got tripped up initially. The whole process took me about 2 hours including research time, and cost me less than $50 total instead of hundreds for an accountant.