If you’re an international founder with a U.S.-registered LLC—especially from India—you may be wondering: “Do I still have to file taxes if my company didn’t make any money?” The short answer is: yes, you do.
Even if your business earned zero revenue, the IRS still expects to see certain forms each year. Skipping these filings can lead to major penalties, even for inactive companies.
This article explains why federal tax filings are required for foreign-owned LLCs, what forms you need, the deadlines involved, and how to avoid common mistakes that cost founders time and money.
Why You Still Have to File Taxes for an Inactive LLC
The IRS doesn’t care if your business was profitable or not—they care that it exists and that it’s properly reporting. The U.S. tax system is structured around disclosure, especially when foreign ownership is involved.
For single-member LLCs owned by non-U.S. residents (which are considered disregarded entities for tax purposes), the IRS requires at least two forms:
- Form 5472: This form discloses who owns the LLC and any transactions between the owner and the business.
- Pro forma Form 1120: This is essentially a blank cover page that gets submitted with Form 5472.
Even if there were no transactions at all, you still must submit these forms to show the IRS your company exists and is foreign-owned. These disclosures help the IRS track potential cross-border money movements and ensure transparency.
Think of it like checking in. Even if nothing happened in your business, the IRS wants to hear from you. Silence can lead to penalties.
What Happens If You Don’t File
Failing to file Form 5472 comes with a $25,000 penalty per year, even if you had no income. The penalty applies if the form is late, missing, or incomplete. If the IRS sends you a notice and you don’t respond or correct it, the penalty can go up significantly.
If you forget two years in a row, you’re looking at $50,000 or more in penalties—even if your business was dormant. This happens more often than you might think, simply because founders assume no activity means no paperwork. Unfortunately, that’s not how it works.
What If You Have a Multi-Member LLC?
Multi-member LLCs are treated as partnerships for tax purposes. That means the filing process is a little different. In this case, you typically need to file:
- Form 1065: U.S. Return of Partnership Income
- Schedule K-1s for each partner
- And often Form 1040-NR for any non-U.S. partners receiving income
However, there is one exception that applies only to multi-member LLCs. According to the IRS, if your partnership had absolutely no income, no expenses, and no business activity of any kind during the year, then you may not need to file Form 1065.
This is the only case where a foreign-owned U.S. company might be exempt from an annual federal filing requirement. But this exception is rare, and it's strongly advised to consult a tax professional before assuming you qualify.
If your multi-member LLC did have any activity, no matter how small, then you must file Form 1065 and issue Schedule K-1s. If these aren't submitted on time, your partnership can face fines—typically starting at $220 per month, per partner, for each month the return is late.
When Are These Forms Due?
The due date for most of these federal tax forms is April 15 of each year (or March 15 for partnerships filing Form 1065). Filing on time is important to avoid late penalties. But if you’re not quite ready, the IRS does allow extensions.
To get an extension, you’ll need to file:
- Form 7004: This gives you an automatic 6-month extension for Forms 5472 and 1120, or Form 1065.
Form 7004 must be submitted by the original due date—either March 15 or April 15 depending on your entity type. The extension gives you more time to file, but it does not extend the deadline for payment if any tax is owed (which generally isn't the case for most inactive foreign-owned LLCs).
Here’s a quick overview:
- Form 5472 + pro forma 1120: Due April 15
- Form 1065: Due March 15
- 1040-NR (if required): Due April 15
It’s always better to file early and avoid last-minute rushes—especially since international mailing and faxing can slow down delivery.
State-Level Requirements Are Separate
Keep in mind: These are federal requirements. States like Delaware and Wyoming have separate filings and fees, but they do not eliminate your federal tax responsibilities.
In Delaware:
- LLCs pay a $300 flat fee by June 1 each year.
- C-Corps must file a report and pay franchise tax by March 1.
In Wyoming:
- You file an annual report and pay a license tax starting at $60, due on your company’s anniversary month.
These state filings are simpler and mostly administrative. Think of them as your annual membership fee to keep your business officially active in the state.
What If I Just Formed My Company Late in the Year?
Even if your LLC was formed at the very end of the year—say, December 31—you still have to file the required forms for that year. There’s no grace period and no “minimum activity” rule. Just forming the company creates a filing obligation.
This surprises many founders who delay setting up bank accounts or operations, assuming they won’t need to file until the next year. But if your company was formed, the IRS expects to hear from it.
Can I File These Forms Myself?
Technically, yes—you can. But the process is not beginner-friendly. Form 5472 has specific formatting and must be submitted with a pro forma Form 1120 either by fax or mail, not e-filed. If you miss details—like using the correct IRS codes or attaching the required documents—it can trigger fines or rejection.
Many international founders prefer to work with a tax professional who understands the unique filing rules for foreign-owned LLCs. Mistakes can cost thousands, so unless you're confident navigating IRS instructions, it’s worth outsourcing.
How Bookmate Helps Founders Stay Compliant
At Bookmate, we specialize in helping international founders—especially from India—stay compliant with U.S. tax laws. We know the exact forms that foreign-owned LLCs must file, and we handle every step of the process for you.
Here’s how our process works:
- We start with a free Zoom consultation to understand your structure and filing needs.
- We send over a simple engagement letter and invoice.
- You fill out a secure web form with your company details.
- We prepare all required forms and review them with you.
- We handle submission—by fax, mail, or e-file as required—and respond to IRS notices, if needed.
Everything is done online and tailored for non-U.S. residents running U.S. companies. No paper. No physical mailing. Just easy, remote compliance.
Final Thoughts
Just because your business didn’t make money doesn’t mean you can ignore U.S. tax obligations. Forming an LLC comes with ongoing compliance—even if it’s inactive. The IRS treats it like a living, breathing entity that must report back once a year.
The good news is, filing the necessary forms is relatively simple once you know what’s required. And with the right support, it can be handled stress-free.
Avoid turning a quiet year into a $25,000 penalty. Stay informed, stay compliant, and if you’re not sure what you need—ask.
If you're unsure what forms you need, book a free consultation or visit trybookmate.co to learn more.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Each tax situation is unique. Please consult Bookmate or a qualified advisor.
