I take it that your client has an LLC that’s registered as an S-Corp for tax purposes. If this is the case, then the client is required to file an 1120-S for each tax year s/he’s in business regardless of how much income is generated. If $0.00 in income was made, then the 1120-S should reflect that. S/he may also have a responsibility to file payroll tax returns and can be assessed a failure to file penalty as well.
The IRS can issue a first time penalty abatement of the failure to file penalty on the first year but the penalties for all other years will stick unless your client had a valid reasonable cause for not filing the tax returns.