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I'm looking for a good resource to understand the penalties I need to pay in order to get my business 'up to date' with the IRS. I called the NY state and I was able to determine the amount needed but I am having trouble finding the same information for the IRS.

Basically, from 2007-now, my business has simply existed. (It was active from '98-'06 with all taxes filed and paid.) I have conducted no business through it and it has no income. I clearly owe some type of fee for keeping it around and not filing taxes. I feel like a scenario like this should be extremely easy to estimate but I can't seem to find the necessary info...

Where should I be looking? How can that be estimated?

  • Reopened. Questions about self-employment income and its taxation are on-topic. Doesn't matter that we're talking about the corporation's taxes here as opposed to the individual's own -- for a 100% owned corp with no other employees, the money eventually flows to the same place. i.e. What makes this on topic is this individual's business is operated for himself, as opposed to being a larger business concern with several employees or shareholders. The penalty/fees/taxes here are out of his pocket. See meta.money.stackexchange.com/questions/15/… – Chris W. Rea Apr 24 '13 at 23:37
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Is the business an S-Corp, LLC or Sole Prop? I am going to guess based on the question that it is an LLC that you never closed with the state and you live in a state (NY) that charges a fee for having an LLC in the state in which case you owe those fees to the state.

I am not aware of any taxes on the mere existence of a business by the IRS. I think you are going to find out that the are no taxes owed to the IRS for this nonexistent activity.

  • -1 the OP explicitly mentioned the business have filed taxes before. – littleadv Apr 25 '13 at 21:36
  • @littleadv Yes and it is very common for people to use the term business tax return for a sole prop or LLC. It is not technically correct but it is common. The OP never returned so we will never know, but chances are he is talking about a single member LLC. – stoj May 1 '13 at 0:58
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You need to hire a tax professional and have them sort it out for you properly and advise you on how to proceed next. Don't do it yourself, you're way past the stage when you could. You're out of compliance, and you're right - there are penalties that a professional might know how to mitigate, and maybe even negotiate a waiver with the IRS, depending on the circumstances of the case.

Be careful of answers like "you don't need to pay anything" that are based on nothing of facts. Based on what you said in the question and in the comments, it actually sounds like you do have to pay something, and you're in trouble with the IRS already. It might be that you misunderstood something in the past (e.g.: you said the business had filed taxes before, but in fact that might never happened and you're confusing "business filed taxes" with "I filed schedule C") or it might be the actual factual representation of things (you did in fact filed a tax return for your business with the IRS, either form 1120 of some kind or 1065). In any case a good licensed (CPA or EA) professional will help you sort it out and educate you on what you need to do in the future.

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