Citrus Heights, CA asked in Tax Law and Business Law for California

Q: Filing State taxes with Franchise tax board when annual taxes have not been paid for LLC?

This is a two part question.

I started a single member LLC in California in 2017. The LLC never conducted any business however, I have not yet dissolved it. Currently, it is suspended with the Sectary of State. Every year, I file a schedule C federal tax return and no state return (The schedule C file is for a cash paying different business not associated with the LLC ). Consequently I have failed to pay the annual $800 due taxes on the LLC. If I file a state return this year will I be audited because it will bring to their attention that my LLC fees are due? or will they automatically deduct the LLC taxes I owe from my franchise (state) tax return?

Also, Considering it is a single-member LLC is there a specific place that the name of the LLC needs to be mentioned in my federal return? Or can I just continue filing as I do every year for the unknown related self-employment income I receive.

Thank you in advance!

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1 Lawyer Answer
Kenneth Sisco
Kenneth Sisco
  • Norco, CA
  • Licensed in California

A: I am not advising you not to pay your annual minimum tax, or not to dissolve your LLC; only what will happen if you don't. If set up properly, the minimum tax is assessed against the LLC, not you. If it is not paid, the LLC will be suspended. If you do not dissolve the LLC and do not pay the fees, it will be suspended. You may receive some scary, threatening letters, but that is all. If in the future you want to revive your LLC, you can do so by paying the back taxes and penalties, unless someone else has taken the name. If the LLC did no business and had no income, I can't imagine why you would mention the LLC on either your 1040 or 540.

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