Can I get a penalty waived if I didn't know my LLC owed franchise tax?

Depends on the state. Most have a first-time abatement if you ask. I did it in Texas and they removed the penalty but not the interest.

What state? That's the only thing that matters here.

CA is tough tough. The FTB rarely waives the first penalty unless you have a very clean record and a decent excuse. "Didn't know" usually won't cut it, but you can try a reasonable cause statement.

Yeah California is a different beast. I've heard of them waiving once if you've been compliant for years and this was a one-off. But they don't have a formal first-time forgiveness program like some other staTes.

Reasonable cause is your only path. Ignorance alone is not reasonable cause in their eyes. You'd need to show something like you never received the notice, or a medical issue, or reliance on a professional who screwed up.

I tried that in CA two years ago. Wrote a letter explaining I was a sole owner and didn't realize the minimum tax applied even with zero revenue. They denied it. Cost me $800. Not trying to discourage you but don't get your hopes up.

I paid it. Wasn't worth the time. But if the amount is small enough maybe it's worth one letter. Just don't hire anyone to do it for you or you'll spend more than the penalty.

One more thing. If you do write them, be specific about why you missed it. Don't just say "I didn't know." Say something like "I never received the reminder notice because my registered agent addresx was outdated" or whatever actually happened. They respond better to concrete facts.

Also check if you qualify for the small business exemption if this is your first year. Might not help with the penalty but could reduce what you owe going forward.