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A company is incorporated in the state of Florida; it was formed by a wantrepreneur. This company has no employees, no location, no profits, and no losses; the only proof this company exists is on paper.

Is this company required to file taxes for the previous year, and if they don't, will they face any punishment?

  • What does Company A have to do with Company B? – BlueDogRanch Mar 8 at 21:48
  • Do they have revenue/expenses? – A. K. Mar 24 at 4:58
  • @TTE please reread the part of the question "This company has no employees, no location, no profits and no losses; the only proof this company exists is on paper." – User37849012643 Mar 24 at 12:48
  • Yes I understand no profit no loss but you can have $4000 in revenue followed by $4000 in expenses which gives $0 profit/loss. I will assume those amounts are $0 also. – A. K. Mar 24 at 14:33
  • @TTE, no money has gone through the business at all. – User37849012643 Mar 24 at 15:05
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Is this company required to file taxes for the previous year, and if they don't, will they face any punishment?

Yes. Every corporation is required to file an IRS Form 1120 every year (the same rule does not apply to trusts or limited liability companies), even if it has no revenue or expenses. See 26 USC § 6012(a)(2) and Treas. Reg. § 1.6012-2 ("Except as provided in paragraphs (e) and (g)(1) of this section with respect to charitable and other organizations having unrelated business income and to certain foreign corporations, respectively, every corporation, as defined in section 7701(a)(3), subject to taxation under subtitle A of the Code shall make a return of income regardless of whether it has taxable income or regardless of the amount of its gross income.").

The penalty, assuming that no tax is actually due as per the question, is a modest fail to file a return fine that was $210 in 2018. 26 USC § 6651(a) and (i); Rev. Proc. 2018-18. The fine will be $215 in 2019 ($205 for an S-corporation). Rev. Proc. 2018-57.

A state income tax must be filed by a Florida corporation only if it has income in the state in a given year. So, while there is a federal requirement and penalty, there is not a state one.

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    Not sure what the down vote was for (as the answer was correct), but I have added citations. – ohwilleke Apr 1 at 20:14

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