Initial Return

An initial return is simply the first return your company files with the IRS. Both Form 1120 and Form 1065 have a small checkbox near the top labeled Initial return, and ticking it tells the IRS this is year one, so it should not go looking for earlier filings under your EIN. Foreign-owned single-member LLCs tick this box on their first pro forma 1120 that carries Form 5472.

The initial return covers a short period in most cases. An LLC formed on July 1, 2025 has a first tax year of July 1 to December 31, 2025, with the Form 5472 package due April 15, 2026, or March 15, 2026 for a multi-member LLC filing its first Form 1065. Form 7004 can extend either deadline by six months if you are not ready.

New founders often assume a company with no revenue has nothing to file, and the initial return is exactly where that mistake happens. Formation itself usually creates reportable transactions: the state filing fee you paid personally, the $1,000 you deposited to open the bank account, even equipment you transferred to the company. Each is a capital contribution that belongs on the first Form 5472, and skipping the filing risks the $25,000 penalty from day one.

The initial return also sets your record straight for the future. It establishes the tax year, confirms the EIN is active, and starts a clean filing history, which matters if you ever need to show good compliance, for example when asking the IRS to remove a penalty for reasonable cause. Filing a correct first return is much easier than explaining a missing one years later.