We got a $60k tax penalty for a zero-revenue side project
by lukaslukas | 2025-11-10 13:25:00+00:00
In 2020, in the middle of COVID, a few friends and I decided that obviously the world needed another presentation tool.

Our pain point was simple: we hated fighting with PowerPoint/Google Slides. We just wanted to write content and get nice slides without babysitting fonts, sizes, alignment, colors, and 19 different "Title + Subtitle" layouts that all somehow looked bad.

So we built a prototype: a tiny click-together slide builder. Then we decided clicking was too slow and turned it into a full markdown-to-slides thing. Write markdown in, pretty slides out. Easy.

Then, like every good side project, we started bolting on features: Image uploads, PDF generation via API, AI integration and more and more stuff nobody had actually asked for....

Somewhere in there, in peak "we're definitely the next unicorn" mode, we incorporated a US company through Stripe Atlas. To feel extra serious, we issued ourselves 10,000,000 shares. Because that's what real startups do, right?

Then we went back to happily shipping features and... not so happily not. shipping a single paid plan.

(fast-forward about a year and a half)

One day a colleague messages us:

> "Hey, the federal portal says we owe $60,000 in penalties for not filing a tax return."

We all experienced the same full-body heat wave usually reserved for production database drops.

(Note for readers: We are originally from the EU, where if a company has no income, it doesn't pay any taxes and if you receive a fine, it is usually a few hundred euros max)

And so we learned something interesting: the number of shares you issue can influence how various fees and penalties are calculated. Which is nice to know BEFORE you click 10,000,000.

We spent days and nights reading IRS docs, emailing people, trying to understand if we'd just bankrupted a project that didn't even have a pricing page.

In the end, the solution was hilariously boring:

1) We filed a zero-revenue tax return.

2) The online system recalculated everything.

3) Our terrifying $60k penalty turned into something around $1500, which we paid.

Crisis kind of averted.

Then the end of the next year approached and we all had the same thought: "We're not doing this again."

Technically, we probably could have just ignored the company and let it die a slow legal death. But we're those annoying people who like things "done properly", so we paid roughly another $2,000 to have someone help us shut the company down the right way.

Total bill for our "we're definitely founders now" moment: aprox. $3,500 and a lot of stress and $0 in revenue.

After that, we basically put the project to sleep. Everyone had their own businesses, and this was a sufficiently painful lesson.

Except... we never stopped using it.

Internally, we kept generating all our slides with it. And honestly? The output still feels great. It's fast, it looks good, and once you get used to it, going back to Google Slides or Keynote feels like trying to design posters in Excel.

Recently, AI helped us refactor a bunch of the code, polish things, and add features we always wanted but never had the energy to implement.

So now the project is alive again at slidepicker.com.

The two takeaways from all this:

1. Don't incorporate (especially in another country), until you have at least one paying customer. It may be better to wait until these customers generate a stable income.

2. If you do incorporate, talk to someone who actually understands taxes before you excitedly type "10,000,000 shares" into a form.

And if you just want nice slides from markdown without accidentally speedrunning US corporate law, you can play with it at slidepicker.com.