Home Articles FAQ Site Map
This article is my opinion, and not legal advice. I am a judgment broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.
When the economy took a nosedive and the biggest customers for my computer and network consulting business folded, I then decided to close down my class-C corporation. Where I lived, it cost me almost $2,000 every year to keep my C-corporation running, primarily due to having to pay State taxes and paying an accountant to do the corporate tax returns. When revenue is low, it is expensive to keep corporate entities running.
In the good old days, the booming economy let the IRS focus primarily on income-earners. Many people used to set up corporations or LLCs, and then just ignored them. Even if people got a tax ID number for their LLC or company; if they never did any business, they filed no tax returns; and in the past, the IRS left them alone.
For more than a few years, the IRS has been charging a penalty for not filing a tax return. The penalty charged depends on the type of entity filing. In 2010, the IRS substantially raised their penalty fees.
Public law 111-92, the "Section 16 of the Worker, Homeownership and Business Assistance Act of 2009" increased the penalty for failure to file partnership and S-corporation tax returns (LLCs taxed as partnerships or S-corporations). The late filing penalty was raised from $89 per partner or shareholder to $195 per partner or shareholder for each full or partial month, that a business-related tax return filing was late.
People owning a "dormant" company registered somewhere for many years, are now getting hit with tens of thousands in fines, even if their company did not make a dime. Sometimes they never even opened a checking account, however they or their lawyer, or some online site got them a tax ID number for their company, which means they now must file a tax return on time or will owe the IRS money.
If you have a LLC, a C or S-corporation, limited partnership, or an irrevocable trust with a tax ID number; you must file a tax return for that tax number every year. It does not matter whether you owe any taxes or do any business; the tax return must be filed.
The IRS is very serious about their fines. The IRS has tripled the number of agents in the past few years, and they are now trying to squeeze every dime. There seems to be no way to escape owing fines for those not filing on time, even when people cannot afford to pay them.
If you have a dormant company-related entity, deal with it now. If you bring it up with them first, the IRS might be willing to cooperate with you to work out your dormant tax-ID number entity situation.
Go Back To Articles JudgmentBuy.com Home Page
|JudgmentBuy - Contact: John Adams at firstname.lastname@example.org|
© Copyright 2001-2017 John Adams. Entire site is protected by copyright laws. All rights reserved.