Suppose I am a non-resident who is the sole member of an LLC incorporated in Wyoming. Suppose the LLC has no activity and no income. The only expenses relating to the LLC is the yearly Wyoming license tax, and some lawyer/accountant fees. I expect this situation to continue for the foreseeable future. Will I be subject to any penalties or differing reporting requirements if this situation continues?

I am asking because the IRS appears to classify some long-term loss-making "businesses" as "hobbies", and I am not sure if I could be classified as such.

1 Answer 1


I don't know anything about Wyoming law, but I'm fairly certain that the only consequence is that the IRS will treat your business as a hobby and you would not be able to deduct losses. Perhaps there are similar tax provisions in Wyoming state law.

States like Wyoming are generally happy to receive your annual fees. A business that isn't doing anything doesn't cause any harm so there is no need to further regulate or penalize it.

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