Last reviewed October 7, 2026 · By the NYBACS advisory team
Short answer
Usually yes. A single-member LLC owned by a non-US person must file Form 5472 with a pro forma Form 1120 whenever it has a reportable transaction with its owner — and funding the LLC or paying its formation fees counts, even with zero revenue. A multi-member LLC can skip Form 1065 only if it had no income and no deductible expenses at all. An LLC taxed as a C-Corp must file Form 1120 regardless.
Key takeaways
- For a foreign-owned single-member LLC, the filing trigger is a related-party transaction, not income — so "no revenue" rarely means "no filing".
- The only real exception for a disregarded LLC is a year with no reportable transactions at all, which is uncommon in practice.
- A partnership is excused from Form 1065 only when it had no income and no expenditures treated as deductions or credits.
- Every domestic corporation, including an LLC that elected C-Corp status, must file Form 1120 whether or not it has taxable income.
- State annual taxes and reports, such as Delaware's LLC tax, are generally owed whether or not the company earned anything.
Why zero revenue does not switch off the filing
Founders often form a US LLC months before the first customer pays. During that period, the LLC may have no sales at all — but it almost always has money moving between it and its owner:
- the owner wires an opening deposit so the bank or fintech account is active;
- the owner's card pays the formation agent, registered agent or website costs;
- the owner covers software subscriptions on the LLC's behalf.
For a disregarded LLC with a foreign owner, each of these is a reportable transaction on Form 5472. The filing exists to show the IRS what flowed between the US entity and its foreign owner, so a dormant-looking year with a $5,000 opening deposit still produces a filing.
How the no-income answer differs by classification
The rule is not the same for every LLC, which is where many online answers go wrong.
| LLC tax classification | Filing in a no-revenue year | When it can genuinely be skipped |
|---|---|---|
| Disregarded (single foreign owner) | Form 5472 + pro forma Form 1120 | Only if there were no reportable transactions with the owner or other related parties |
| Partnership (two or more members) | Form 1065 | Only if the partnership had no income and no expenditures treated as deductions or credits |
| Corporation (Form 8832 election) | Form 1120 | Never — all domestic corporations file whether or not they have taxable income |
The partnership exception is narrow. A two-member LLC that paid for software, a bookkeeper or a domain during the year has incurred expenses, and once deductions exist the exception is generally gone. A corporate-elected LLC has no exception at all; a year with no income simply means the Form 1120 shows no tax due.
Pre-revenue does not always mean pre-business
A useful nuance: an LLC that is still setting up — before it starts operating — incurs start-up and organizational costs rather than ordinary operating expenses. Those costs are generally capitalized and deducted or amortized only once the business begins. That matters for two reasons:
- For a partnership, it affects whether there were any deductions in the year, and therefore whether the Form 1065 exception might apply.
- For any classification, it affects how costs are carried forward to the year operations begin.
Where the line falls between "preparing to do business" and "doing business" is a facts question. Signing a first customer contract, launching a product for sale or hiring staff usually mark the start; buying a domain alone usually does not. Even when no Form 1065 is strictly required, many advisers file one to record the expense history and avoid a later dispute about whether the exception applied.
The cost of skipping a no-income year
For a foreign-owned disregarded LLC, missing the pro forma filing can trigger the full Form 5472 penalty even though the LLC owed no tax — the penalty is per form, not a percentage of tax. For a corporation that owed nothing, the percentage-based late-filing penalty may be small, but a missing Form 5472 penalty still applies if the company is 25% or more foreign-owned.
There is also a practical cost. Banks and payment processors increasingly ask for prior-year tax filings during periodic KYC reviews. A gap in an otherwise clean history is harder to explain than a simple zero-revenue return, and reconstructing old transactions later takes longer than filing on time.
State obligations in a dormant year
Most state charges are not income-based. A Delaware LLC owes its flat annual tax by June 1 every year it is active on the state's records, with no proration for a partial year. A Delaware corporation files an annual report and franchise tax by March 1. California's minimum franchise tax applies to LLCs registered or doing business there even with no profit. If the LLC is truly not going to be used, formally dissolving it — and filing a final federal return that reports any dissolution costs — is usually cheaper than paying dormant-year fees indefinitely.
Common mistakes to avoid
- Treating a zero-revenue year as a zero-filing year for a single-member LLC owned from abroad.
- Forgetting that the owner paying the LLC's formation and registered agent fees is itself a reportable transaction.
- Assuming a two-member LLC can skip Form 1065 even though it paid for software or services during the year.
- Believing a C-Corp-elected LLC with no income has nothing to file.
- Letting state annual taxes lapse during a quiet year, which can lead to loss of good standing.
- Keeping an unused LLC alive for years instead of dissolving it with a final return.
NYBACS 360° support
How NYBACS helps
- Reviews a quiet year's bank and card activity to identify every owner-funded transaction that must be reported.
- Confirms whether a multi-member LLC genuinely qualifies for the no-income Form 1065 exception or should file anyway.
- Prepares low-activity Form 5472 and pro forma Form 1120 filings and coordinates timely fax or mail submission.
- Separates pre-launch start-up costs from operating expenses so they are carried correctly into the first active year.
- Advises on keeping a dormant LLC in good standing or closing it cleanly with final federal and state filings.
Frequently Asked Questions
What if my LLC's bank account was never opened and the owner paid nothing?
If there were genuinely no transactions between the LLC and any related party during the year, a foreign-owned disregarded LLC has no Form 5472 to file for that year. This is rare, because someone has to pay the formation and registered agent fees, so check carefully who paid before relying on it.
Do I report the owner's opening deposit as income?
No. Money the owner contributes is capital, not revenue. It is reported on Form 5472 as a related-party transaction, but it does not create taxable income for the LLC.
Is filing in a no-income year expensive?
It is usually one of the simpler filings, because the transaction list is short. Cost depends on how organized the records are; a year where the owner paid costs from several personal cards takes longer to document than one funded through a single bank transfer.
Our LLC had no income for three years and never filed. What now?
Identify which years had reportable transactions, reconstruct them from bank and card records, and prepare the missing filings together. Have the situation reviewed before submitting, because the explanation and any penalty-relief request should be consistent across all the late years.
