Pakistan-based founders with U.S. LLCs and multi-member partnerships must file Form 1065 every year – even with zero income. We file it correctly, on time, and with the K-2/K-3 schedules required for non-U.S. partners.
You formed a U.S. LLC with a co-founder. You’ve been building the business, handling clients, managing everything from Karachi or Lahore or wherever you’re based. Filing taxes for a company that’s barely off the ground – or one that hasn’t earned a dollar yet – didn’t feel urgent. That makes sense.
But the IRS doesn’t factor in that you’re busy building something from Pakistan. A missing Form 1065 looks like a problem with your entity, and it gives them a reason to look closer.
Here’s what trips up Pakistan-based founders most often:
In most cases that’s wrong – the obligation kicks in as long as the entity existed during the tax year, regardless of activity. A dormant LLC still needs to file Form 1065 every year it exists as a multi-member entity.
These are required when even one partner is a non-U.S. person, and most people don’t know that. Filing without them – even if everything else is correct – results in an incomplete return and triggers IRS correspondence.
By the time they realize the mistake, the window has already closed. Form 1065 is due March 15 – a full month before the individual return deadline. Many founders miss this and incur penalties before they even realize a filing was due.
Which then creates a separate problem for every individual connected to the entity. Every partner needs their K-1 to file their own personal return – a missed K-1 delays every partner’s filing and can expose each of them to late filing issues.
TurboTax and similar tools don’t support Schedules K-2 and K-3 for foreign partners. Filing through these platforms without required schedules produces an incomplete return – which the IRS will flag. Non-resident partnership filings need specialized preparation.
The second your LLC has two or more members – and you haven’t formally elected a different tax classification – the IRS automatically treats it as a partnership. You’ve stepped into one of the more complex corners of the U.S. tax code without ever choosing to be there.
IRS Penalty Alert
A 3-partner LLC that misses the deadline by just 3 months is looking at $1,980 in penalties – on a return that may have reported zero income. And if there’s a silent investor in Lahore or Islamabad who co-owns that LLC? They’re personally exposed too, because the K-1 they never received connects directly to their own IRS obligations.
If there’s a silent investor in Lahore or Islamabad who co-owns that LLC? They’re personally exposed too, because the K-1 they never received connects directly to their own IRS obligations. One unfiled partnership return creates downstream risk for every single partner.
Not sure if this applies to you? Talk to our team – free 15-minute consultation.
Form 1065 is the annual federal informational return that U.S. partnerships and multi-member LLCs must file with the IRS. The partnership itself doesn’t pay tax – income, deductions, and credits pass through to each partner instead. Each partner then reports their share on their personal return using Schedule K-1. If any partner is a non-U.S. person, Schedules K-2 and K-3 are also required.
The partnership reports everything – revenue, expenses, deductions – but doesn’t pay tax at the entity level. Income passes through to each partner individually. Every partner gets a Schedule K-1 that shows their share, and they report that on their own personal tax return.
This is what’s sometimes called the “domino effect” of partnership tax. If Form 1065 is filed incorrectly, the K-1 numbers are wrong. Wrong K-1 numbers mean every partner’s individual return has a problem – including their Form 1040-NR. One error at the partnership level creates downstream issues the IRS can trace straight to each partner’s personal filings.
The Pakistan-Based Founder Filing Chain
One error in Form 1065 flows downstream through every K-1 into every partner’s personal return.
Tax Reality Check
This is where a lot of people get confused. Form 1065 itself doesn’t generate a tax bill at the entity level. But the K-1 you receive as a partner shows your share of the partnership’s income – and that income is taxable on your personal return.
So while the partnership files an informational return, you as a non-resident partner will likely need to file Form 1040-NR to report and pay tax on your share. Two separate obligations, and one directly triggers the other.
What most accountants and software miss for non-resident partners:
When any partner is a non-U.S. person, the IRS requires Schedules K-2 and K-3 for international tax information. Filing without them is one of the most common triggers for IRS correspondence on foreign-owned partnerships. Most domestic U.S. accountants don’t prepare these.
For partnerships with income allocable to foreign partners, there may also be a withholding requirement reported on Forms 8804 and 8805. Most consumer tax software doesn’t support them. It’s a specialized area – and skipping it is a common reason for IRS notices.
Pakistan’s tax year runs July to June. The U.S. tax year runs January to December. That mismatch creates a real reconciliation challenge for NRP founders trying to line up their Pakistani income records with U.S. partnership filing requirements. A domestic U.S. accountant probably won’t think to ask about it.
Not sure if your LLC requires K-2/K-3 or has a withholding obligation? Talk to our team – free 15-minute consultation.
This comes up constantly with Pakistani founders who registered a U.S. LLC and then put it on hold. The logic makes sense on the surface: no income, no activity, nothing to report, nothing to file. But that’s not how the IRS sees it.
A dormant LLC with two Pakistani partners that hasn’t filed since formation is quietly accumulating $220 per partner per month in potential penalty exposure, every single month.
If you have an LLC that’s been sitting idle for a year, two years, or longer, the move is to get the returns filed and get current. In some cases, first-time penalty abatement may be available for founders who simply didn’t know about the filing requirement and have a clean IRS history. That’s something our team can look at as part of the engagement.
Penalty Accumulation Example
3-partner LLC, zero income reported – how fast penalties add up:
Formula: $220 x 3 partners x months late. Each missed year restarts the clock. Two years dormant and unfiled = up to $15,840 in accumulated penalties.
For founders who simply didn’t know about the filing requirement and have a clean IRS history, first-time penalty abatement might be worth exploring. This is something our team reviews as part of every catch-up engagement – it’s not guaranteed, but it’s always assessed when you qualify.
If your LLC has been dormant or unfiled, the best move is to get current now – before penalties compound further.
Every schedule your partnership requires gets prepared and filed correctly. Nothing left out, nothing assumed.
We file on or before March 15 – or file a Form 7004 extension to September 15 if you need more time.
Each partner gets their Schedule K-1 in time to use it for their individual return. This step gets skipped more often than you’d think.
We work specifically with Pakistan-based founders and NRPs. This is the work we do every day.
Every return we prepare is documented and defensible. If the IRS ever questions your filing, you have a complete, accurate record prepared by a qualified professional.
The entire process happens online. You don’t need to be in the U.S., visit a physical office, or deal with U.S. time zones.
Five straightforward steps from intake to IRS confirmation. Most clients complete Step 1 in under 20 minutes.
Fill out a short intake form with basic information about your partnership, partners, and any income or expenses. No tax knowledge required. Most clients finish in under 20 minutes.
Our team goes through your entity information and follows up for anything additional – your EIN, partner details, financial records if applicable. We tell you exactly what we need and why.
We prepare Form 1065, all required schedules including K-1 for each partner, and K-2/K-3 if any partner is a non-U.S. person. You don’t touch a single IRS form.
You receive a copy of the completed return before anything is submitted. Review it, ask questions if you have them. Nothing goes to the IRS without your sign-off.
We e-file directly with the IRS and send you the confirmation. Each partner receives their K-1. You’re done.
Here’s exactly what you get when you file Form 1065 with us. No hidden extras, no surprise gaps.
Service Overview
Every schedule, every form, every partner document – prepared correctly and filed on time. No assumptions about what applies to your situation.
Core Federal Filing
Non-Resident Partner Schedules
Deadline and Post-Filing
State-level partnership returns and prior-year filings are available as add-ons. If your situation requires filings in multiple states, or if you have missed years to catch up on, our team handles those as part of a separate engagement scoped to your needs.
Not sure which tier fits? Book a free 15-minute call and we’ll point you in the right direction.
Original Deadline
Original due date for Form 1065 for calendar-year partnerships filing the 2025 tax year
Extended Deadline
Extended deadline via Form 7004, which gives a 6-month extension at no cost
Past September 15
Penalties start or keep accumulating per partner, per month – up to 12 months per year missed
Penalty Calculator
How much could late filing cost your partnership?
The IRS charges $220 per partner per month for failure to file, for up to 12 months. Every partner connected to an unfiled partnership return accumulates this exposure independently.
A 3-partner LLC that is 3 months late = $1,980. That same LLC unfiled for a full year = $7,920.
One important note: a Form 7004 extension only extends the filing deadline. If your partnership has a tax balance due at the partner level, that’s a separate obligation with its own timeline. Filing an extension is free. Not filing at all is very expensive.
File Before the Deadline – Start Today
Extensions are available, but filing correctly from the start avoids IRS back-and-forth and keeps your U.S. entity in good standing.
Trusted by 200+ Pakistan-based U.S. business owners
We had two partners – one in Karachi, one in Dubai – and three accountants told us K-2 and K-3 weren’t necessary. They were wrong. This team knew exactly what was required and handled everything.
I had no idea my LLC needed to file even with zero revenue. Found out after getting an IRS notice. They filed two years of returns and got us fully caught up.
The whole process was remote, fast, and they explained every step. Didn’t have to be in the U.S. or figure out any of it myself.
Join Hundreds of NRP Founders Who File with Confidence
200+ Pakistan-based U.S. business owners have trusted us to handle their Form 1065 filings – correctly, on time, with every required schedule attached.
Join hundreds of NRP founders who file with confidence – on time, fully compliant, with every required schedule.
Filing Basics
Yes, in most cases. If the multi-member LLC existed at any point during the tax year, it generally has to file Form 1065 – even with zero income, no activity, and no distributions. The filing obligation starts from the year the entity was formed, not the year it first brought in revenue.
Most Pakistani founders only find this out after an IRS notice arrives for one or more missed years.
March 15, 2026 is the original deadline for calendar-year partnerships. Need more time? Form 7004 gets you a 6-month extension, pushing the deadline to September 15, 2026.
The extension request is free and doesn’t require any explanation. It does not extend any payment obligation at the partner level, though – that’s a separate matter.
The IRS charges $220 per partner per month for failure to file, up to 12 months. Three partners, three months late – that’s $1,980. The same LLC sitting unfiled for a full year comes to $7,920.
For founders who have never filed before and have a clean IRS history, first-time penalty abatement might be worth exploring.
No. Form 1065 is an informational return – the partnership reports income and deductions but doesn’t pay tax at the entity level. That obligation passes through to the individual partners, who each report their share on their personal returns using the Schedule K-1 from the partnership.
As a non-resident partner, your individual filing is typically Form 1040-NR.
Schedule K-1 is what the partnership issues to each partner after filing Form 1065. It shows each partner’s share of income, deductions, and credits for the year. Partners need their K-1 to complete their own individual tax returns – which is exactly why the timing of the partnership filing has a direct effect on every partner’s personal filing situation.
Non-Resident & Pakistan-Specific Questions
Yes. If any partner in the U.S. partnership is a non-U.S. person – whether they’re in Pakistan, the UAE, the UK, or anywhere else outside the U.S. – Schedules K-2 and K-3 are generally required. These schedules give the IRS the international tax information it needs when partners are non-residents.
Filing without them when they’re required is one of the most common triggers for IRS correspondence on foreign-owned partnerships.
TurboTax and similar consumer tools don’t support Schedules K-2 and K-3 for foreign partners. If you file through one of these platforms without the required schedules, you’re submitting an incomplete return.
Non-resident partnership filings need specialized preparation – consumer software just wasn’t designed for this.
If your U.S. LLC has two or more members and you haven’t filed the appropriate IRS election forms to be taxed as an S-Corp or C-Corp, it’s treated as a partnership by default. That default classification triggers the Form 1065 requirement every year – including years with no income at all.
Yes. A dormant or inactive LLC still has a filing obligation for every year it existed as a multi-member entity. Each missed year carries its own penalty exposure. In some situations, penalty abatement may reduce what you owe for prior years.
Best move is to get the returns filed and get current as quickly as possible.
Still have questions? Book a free 15-minute call and our team will answer them directly.
Cost Concern
The return may show zero revenue, but skipping it exposes every partner to $220 per month in IRS penalties. On a 3-partner LLC, one full year unfiled equals $7,920. If any of those partners have a silent investor back in Pakistan, that person is personally exposed too.
DIY Intent
Consumer tax software doesn’t support Schedules K-2 and K-3 for non-resident partners. Filing without these when they’re required produces an incomplete return, which triggers IRS notices. The IRS also requires e-filing for partnerships with 10 or more partners.
Uncertainty
Two or more members, no tax classification election filed – it’s a partnership by default. That’s not something that needs to be agreed upon or chosen. It’s baked into how the IRS categorizes multi-member LLCs, and Form 1065 is required.
Security Concern
All documents are transmitted through encrypted, secure channels. We operate under U.S. practitioner confidentiality standards, and your information is handled the same way it would be at any qualified U.S.-based professional firm.
Deferral
The penalty clock runs from the year the entity was formed – not the year it started earning. Every year you wait adds another 12 months of potential penalty exposure across every partner. The longer it sits unfiled, the more it costs to get caught up.
Ready to Get Compliant? Let’s Get Started
Our team handles everything – from the intake form to the IRS e-file confirmation. Fully remote, no U.S. presence required.
If we prepare your Form 1065 and the IRS rejects it due to a preparer error, we’ll correct and refile at no additional cost. Every return is reviewed by a qualified tax professional before submission. We stand behind the work, and we don’t consider a filing complete until it’s accepted.
Your 2025 Form 1065 Is Due March 15, 2026 – Extensions are available, but filing correctly from the start avoids IRS back-and-forth and keeps your U.S. entity in good standing.
Our team handles everything from the intake form to the IRS e-file confirmation. Fully remote. No U.S. presence required. No tax knowledge needed.
Choose which AI assistant to use