Form 1065 & Multi-Member Partnerships

How to File Form 1065 With Foreign Partners and No ITINs — Step by Step (TY2025)

9 min readArticle

Written byLipai WangFounder · IRS-registered tax professional

Filing path

Partnership return flow (Form 1065)

How a multi-member foreign-owned LLC reports and passes income through to its partners.

Confirm 2+ members
A multi-member LLC defaults to partnership treatment.
Prepare Form 1065
Report partnership income, deductions, and allocations.
Issue Schedule K-1s
Each partner gets a K-1 with their distributive share.
Handle withholding
Foreign partners may trigger Form 8804/8805 withholding.

Key formsForm 1065Schedule K-1Form 8804/8805

Key Takeaways

A timely Form 7004 moved the tax-year-2025 Form 1065 due date to September 15, 2026; the extension does not extend any payment.
Zero sales and an empty bank account do not prove the Form 1065 filing exception; when in doubt, file the all-zero return and start the statute of limitations.
On a paper return, leave K-1 Item E blank and attach an IRS-cited statement; the 000-00-0000 convention is for authorized e-file only.
A foreign partner with no U.S. income and no U.S. return does not need an ITIN to be listed on a K-1.
Designate a partnership representative with a U.S. address; the election out of the audit regime requires partner TINs and is not realistic here.

Who this workflow is for

This is the filing sequence for a domestic multi-member LLC taxed as a partnership whose partners are foreign individuals with no Social Security number and no ITIN, and who have no separate U.S. filing obligation of their own. The typical case is a Delaware or Wyoming LLC with two non-U.S. owners, little or no activity in 2025, and a Form 7004 extension that moved the tax-year-2025 Form 1065 due date from March 16, 2026 to September 15, 2026. If any partner is a U.S. person, or the LLC had effectively connected income allocable to a foreign partner, stop here and read the Section 1446 withholding guide first, because Forms 8804 and 8805 change the sequence.

Step 1: Confirm the return is due at all, then decide to file it

The 2025 Form 1065 instructions describe a narrow exception for a partnership that neither receives gross income nor pays or incurs any amount treated as a deduction or credit. Zero sales and an empty company bank account do not prove that exception, because a member who paid formation, registered-agent, or state costs personally may have created a partnership expense or a capital contribution. If you cannot document that every 2025 cost was capitalized rather than deducted, file the return. A filed all-zero Form 1065 costs nothing in tax, starts the three-year assessment period under section 6501, and removes the risk of a section 6698 penalty of $255 per partner per month (returns filed in 2026).

Owner-paid formation costs and the filing exception Form 1065 guide for foreign-owned LLCs

Step 2: Resolve the two decisions the IRS requires from every partnership

First, the partnership representative. Unless the partnership validly elects out of the centralized audit regime, Schedule B requires a designated representative with a substantial presence in the United States, meaning a U.S. address and phone number and availability to meet the IRS. One of the partners can serve using the company's U.S. mailing address. Do not plan on electing out: the IRS election-out procedure asks for each partner's U.S. TIN, so a partnership whose partners have no TIN should treat that election as unavailable. Second, Schedule K-2 and K-3. The domestic filing exception is not available when any direct partner is a foreign person. The separate small-partnership exception, added for tax year 2024, applies when all four Schedule B question 4 conditions are met: gross receipts under $250,000, year-end assets under $1 million, K-1s filed and furnished on time, and no Schedule M-3. It also requires a written notice to each partner and tracking of any partner request for a K-3.

Step 3: Prepare the K-1s without a TIN, the right way

For a paper return, leave Item E of each foreign partner's Schedule K-1 blank and attach a statement that identifies each partner by name, address, and country of residence and explains, citing the IRS guidance on what can be entered on Schedules K-1 and K-3 in place of a TIN, that the partner is a foreign individual who is not required to obtain a U.S. TIN. Never write 000-00-0000, never invent a number, and never copy the e-file convention onto paper: the all-zero entry is permitted only inside an authorized e-file transmission. Do not apply for an ITIN just to fill the box. An ITIN requires a federal tax purpose, and a foreign partner with no U.S. income and no U.S. return does not have one, so a Form W-7 filed for that reason is rejected or wasted.

Do foreign partners need ITINs to file Form 1065?Schedule K-1 for foreign partners

Step 4: Assemble, sign, and mail with proof

The complete package is Form 1065 (all pages, with Schedule B answered and the representative designated), Schedule B-1 for each partner owning 50 percent or more, one Schedule K-1 per partner for the IRS copy plus a furnished copy for each partner, the foreign-partner statement, and the K-2/K-3 small-partnership exception notices. A partner or LLC member signs page 1 as a partner. A two-partner LLC is not required to e-file, because the mandate begins at 10 or more returns of any type in the year or more than 100 partners, so paper filing is the normal route. Mail to the IRS service center listed in the current Form 1065 instructions for your state and situation, use certified mail or a designated private delivery service, and keep the dated receipt with your copy of the return. The postmark on or before September 15, 2026 is your timely-filing proof.

Step 5: What the ForeignLLCTax package produces, and what it does not

The $199 Multi-Member LLC (Form 1065) service is certified for exactly this lane: a zero-activity partnership whose foreign individual partners have valid TINs or no TIN at all. It fills the official IRS Form 1065 and Schedule K-1 PDFs, generates the no-TIN statement and the K-2/K-3 exception notices, and gives you the signing, assembly, and mailing instructions with the certified-mail steps. It does not e-file, does not apply for ITINs, and does not act as your partnership representative. The wizard is free to complete; you pay only after the preflight confirms the return is inside the certified lane, and the package is generated the same day.

Prepare your Form 1065 package ($199, paper-filing, no ITIN needed)Full scenario guide: no income, no partner ITINs

Frequently Asked Questions

Can we file Form 1065 before our foreign partners get ITINs?

Yes. If a partner has no U.S. filing obligation, the IRS does not require an SSN or ITIN just because the partnership files Form 1065. On paper, leave Item E blank and attach the identifying statement.

Is paper filing still allowed for a two-partner LLC in 2026?

Yes. The partnership e-file mandate applies at 10 or more returns of any type in a calendar year or more than 100 partners. A small two-partner LLC may file on paper.

What happens if we miss September 15, 2026?

The section 6698 late-filing penalty for returns filed in 2026 is $255 per partner for each month or part of a month the return is late, up to 12 months. First-time abatement or reasonable cause may be available, but the small-partnership relief of Rev. Proc. 84-35 requires every partner to be a natural person other than a nonresident alien, so it generally does not help foreign-owned LLCs.

Do we also need Forms 8804 and 8805?

Only if the partnership has effectively connected taxable income allocable to a foreign partner. A partnership with no U.S. trade or business income has nothing to withhold under section 1446(a) and does not file those forms.

form 1065partnershipmulti-member LLCSchedule K-1Section 1446foreign partners

IRS Form 1065 Instructions

Official IRS source on irs.gov

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