If you owned a share of a C Corporation, you would not get a K-1. You would only get a W-2 from the company if you were an employee and got a paycheck. If you were simply an investor, you get no papers each year unless there is a dividend paid out, in which case you would get a 1099-DIV.

Since the company went out of business, you may have a realized capital loss that you can deduct on your tax return (subject to certain limits)

If you were not an officer nor active in the business, the IRS can ask you, but you have no responsibility for the financial books and records.

Can they audit you? Yes they can if there is reason to believe the corporation paid you money as either wages or dividends and you did not report it. Otherwise, the answer is they likely won't bother.

If the company is being audited, it would likely have to do with something filed in the last 2 or 3 years. If you were nothing but a slient investor during this period, chances are the IRS just wants to know, but will do nothing about it, particularly if the tax returns of the entity don't show any specific payments to you. On the other hand, if tax returns or employment returns were submitting showing payments to you that you don't know about, the IRS becomes very interested.

Did you receive money from the company in the last 3 years?

If yo have no records and are no reasonably affiliated with running the company, the IRS can knock on the door all they want, but you don't have anything to give.

Chances for you being audited: Very Slim.

You could be audited (less than 2% chance) even if it had nothing to do with the company in question.

Have a great holiday!