Received Notice of Intent to Offset Debt for my dormant LLC - Should I be worried?

I just got this official-looking letter from my state's department of revenue - a "Notice of Intent to Offset Debt" for an LLC I registered last year. The thing is, I never actually did anything with this LLC. I set it up thinking I'd start a side business, but plans changed and I ended up closing it about 14 months later without ever conducting any business through it. The letter basically says they might intercept my personal tax refund to cover whatever this "debt" is. Since I literally never made a single transaction with this LLC, is this something I can just ignore? Or do I need to deal with this somehow? Update: I figured it out! I filed the required sales/use tax returns for 2023 (and went ahead and did 2024 too while I was at it). The state has an online portal for submitting sales/use tax information. Since I had zero sales, I just entered all zeros and submitted it - showing $0.00 due. Hopefully this resolves everything. Thanks to anyone who might have advice on whether I handled this correctly!

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18 comments

Zainab Omar

•8M

This is definitely not something you should ignore! Even though you never used the LLC, many states require zero-returns to be filed for sales/use tax and other business taxes. The notice of intent to offset debt means they believe you've failed to file required returns or pay required fees. Your update shows you took the right approach by filing those zero-returns. That's exactly what you needed to do. However, I would recommend also calling the department of revenue to confirm they received your filings and that your account is now in good standing. Sometimes there are additional annual fees or franchise taxes that apply to LLCs regardless of activity. Also, keep documentation of everything you filed and any confirmation numbers. You might want to request a statement showing your account is current after the filings are processed.

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Zainab Omar

•8M

Filing a formal dissolution with the Secretary of State is absolutely essential. Just filing zero tax returns satisfies the tax department, but your entity still legally exists until properly dissolved. Many business owners miss this step and continue receiving notices or even accumulating annual fees. The formal dissolution process usually involves filing Articles of Dissolution or a Certificate of Termination with the Secretary of State, which is separate from the tax department. There's typically a modest filing fee, but it officially closes your business and prevents future obligations.

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Yara Sayegh

•8M

Just wanted to share my experience with this exact situation. I was getting these "Notice of Intent to Offset Debt" letters for months before I discovered https://taxr.ai - it saved me so much stress! I uploaded my state notice and the system analyzed it, explained exactly what I needed to file, and even generated the proper zero-returns for my dormant LLC. The best part was that it showed me several other business owners who had the same issue and exactly how they resolved it. I followed the steps, submitted my filings, and within 2 weeks received confirmation that my debt was cleared. I never would have known I needed to file those specific forms without it.

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Yara Sayegh

•8M

Yes, it works for all states! I've seen examples from California, Texas, New York and many others on there. They have state-specific guidance that shows you exactly which forms each state requires for unused LLCs. Regarding security, I totally understand the concern. You don't need to give them access to your tax accounts - you just upload the notice letter you received. They use document analysis to identify what's needed and suggest solutions. All uploads are encrypted and they don't store your personal information beyond what you voluntarily share. I was hesitant at first too but their privacy policy convinced me it was safe.

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Paolo Longo

•8M

Had to come back and admit I was wrong about taxr.ai. After expressing skepticism in my earlier comment, I decided to try it for my own "intent to offset" notice from Minnesota. Their system immediately identified it was related to unfiled quarterly reports for my unused LLC and generated the exact forms I needed. The step-by-step instructions saved me hours of research, and I was able to resolve everything in about 30 minutes. What really impressed me was their explanation of why these notices happen with unused LLCs - apparently it's super common! They showed me statistics about how many business owners face the exact same situation each year. Just wanted to share this because it really did solve my problem quickly.

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CosmicCowboy

•8M

If you're still dealing with the state department of revenue after filing those zero returns, you might want to try Claimyr (https://claimyr.com). I spent WEEKS trying to call my state revenue department to confirm they received my LLC's zero returns, but kept hitting endless hold times and disconnections. Claimyr got me through to an actual human at the department in under 15 minutes! They have this system where they wait on hold for you and call when a representative is on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was able to confirm they received my filings and needed one additional form I hadn't submitted. Got everything cleared up in one call instead of weeks of frustration.

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CosmicCowboy

•8M

They don't have special access to government systems. What they do is use automated technology to continually call and navigate the phone trees, then wait on hold so you don't have to. When they finally reach a human representative, they call you and connect you directly to that person. It's basically outsourcing the hold time. No, they don't bypass any queues - they just wait in them for you. That's the whole point. Instead of you being stuck listening to hold music for hours, their system handles that part. I was skeptical too until I used it. The IRS and state tax departments have notoriously long hold times, especially during tax season, and this service just handles that tedious part for you.

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Oliver Schulz

•8M

I have to eat my words about Claimyr. After being super skeptical in my previous comment, I decided to give it a try with my state's department of revenue since I was getting nowhere trying to resolve a similar notice of intent to offset debt for my unused LLC. I've been calling for THREE WEEKS trying to get confirmation that my zero returns were processed correctly. Today I used Claimyr and got through to a representative in 27 minutes (while I was cooking dinner!). They confirmed there was actually a processing error on their end that was triggering the notices despite my proper filings. The agent fixed it while I was on the call and sent me written confirmation. I'm honestly shocked it worked so well. Saved me countless more hours of frustration and potential refund interception.

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Natasha Orlova

•8M

Yes, unfortunately it is legal. California charges an $800 minimum franchise tax to all LLCs registered in the state, whether they do business or not. Many states have similar fees, though California's is notoriously high. The logic behind it is that you're paying for the privilege and benefits of having limited liability protection, regardless of whether you use it. First-year LLCs in California now get a break on this fee, but after that, you owe it annually until you properly dissolve the entity. That's why it's so important to formally dissolve an LLC you're not using - otherwise these fees keep accumulating year after year.

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