I own an LLC in Delaware which is treated as a corporation. The LLC
was created June 2002. Except for the state taxes i have, i would like
to know which forms should i submit to the IRS and what federal taxes
i have to pay. Please take into account that the LLC is owned 100% by
a foreign person, Greek Citizen (me), that there were '0' earnings
during the past year (there was a loss, if that makes a difference),
and that the company still owns a number of electronics and consumer
goods that will be sold during 2003. Please provide details (form
numbers-purpose) because i am not familiar with the US taxing system.

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Clarification of Question by orizon-ga on 18 Jan 2003 11:59 PST

I would also like to add one more question. Given the fact that i do
not do any business in Delaware, which Delaware state taxes do i have
to pay and which forms do i have to file.

Dear Orizon,

In 'speaking' with the good folks at the Delaware tax offices,
they assured me that you do no have to file a tax return, or
pay taxes there, since you do not have a business location in
their fair state. 

Your only responsibility to them is to fill out the report
of officers each year. And they mail that to your agent of
service.

As to the Internal Revenue Service, you must file a Form 1120
US Corporate Income Tax Return.
http://www.irs.gov/pub/irs-pdf/f1120.pdf

You'll find more information than you want, in the IRS's publication
for Corporations
http://www.irs.gov/formspubs/page/0,,id=12185,00.html

Since you are not a US person, owning that corporation, you
must fill out 
Form 5472, Information Return of a 25% Foreign-owned US Corporation
http://www.irs.gov/pub/irs-pdf/f5472.pdf

I haven't quite been able to get an answer about what IRS does
with this information. None of the IRS agents in the usual 
Tax Professional support offices seem to be familiar with it.

But that's it.

Just mail them all in by March 15th, 2003, or file for an
automatic extension, using Form 7004, if you need more time.
http://www.irs.gov/pub/irs-pdf/f7004.pdf

I do hope that helps. Let me know if I can clarify anything more.

Best wishes

Your TaxMama-ga

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Request for Answer Clarification by orizon-ga on 11 Feb 2003 17:28 PST

It took a while to receive a reply, i have already filled all my taxes
except delaware. However, Delaware officers told me that i do have to
pay corporate franchise tax. I am not sure who is right and who is
wrong.

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Clarification of Answer by taxmama-ga on 11 Feb 2003 19:32 PST

Hi Orizon,

I am so sorry that I wasn't able to answer sooner. 
My DSL went out and I was offline since an 15th. 

Anyway, here's the information I got from the folks in Delaware
when I asked the same question for my client, verbatim:


>From your email, it sounds as if your client is only incorporated in 
> Delaware,
>but does not conduct business in Delaware.  If this is the case, your client
>is exempt from filing a Delaware corporate income tax return.  Corporations
>who only incorporate in Delaware and do not conduct business in Delaware, are
>exempt from filing an income tax return.  Your client actual has to have
>physical presence in Delaware to be required to file a Delaware income tax
>return.
>
>If your client is conducting business in Delaware, we can enter into a
>Voluntary Disclosure Agreement.  I will need information on how long the
>corporation has been conducting business in Delaware, what type of 
>business is
>conducted in Delaware and the estimated income tax liability for each 
>year.  I
>will draft an agreement based on the information presented in your letter.
>
>Payments of Delaware corporate income tax can not be made electronically or
>online.  Payment must be made when filing the actual return.
>
>Please advise if you need additional information.
>
>Ronald A Kaminski
>BAB Manager
>Wilmington, DE  19801


I hope this helps.

Best wishes,

Your TaxMama-ga

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Clarification of Answer by taxmama-ga on 26 Feb 2003 17:23 PST

Dear Orizon, 

My apologies if my answer regarding Delaware was not clear.

"Your only responsibility to them is to fill out the report 
of officers each year. And they mail that to your agent of 
service. "

That IS the Franchise Tax Return. All it is, is the reporting
of who the officers are. 

That is the letter they send to your agent of service. Your
agent was supposed to send that to you. That's what they get
the big bucks for.  Make sure you get it from them each year.  
If not...


I have located an online filing/payment link for your future reference. 
(please bookmark this for next year)
 https://ecorp1.state.de.us/default.sph/ecorpWeb.class//secure/LoginFranchise.jsp

Best wishes,

Your TaxMama-ga

I know i do not have to pay income tax return, in my clarification i
made clear that there are other kinds of taxes like franchise tax that
it seems like i have to pay. Your answer regarding the delaware taxes
is not right and i am glad i found out by myself because i could get
in a lot of trouble.