Penalty for Failure to File a Partnership Return

[Bucky]

I know they changed the penalty for filing 1065 late from $50 to $85 per month etc but do the under 10 partners exceptions still apply. A client just received a letter return was never received. I can't find anything that states the exceptions don't still apply.

Bucky

[Jesse]

I had a couple of 1065's that were mailed and the IRS wrote saying the returns were never received. After re-mail, follow up was assessment of late fees. I wrote a letter with each of the partners name and soc sec number stating:

Under Rev. Proc. 84-35 we are requesting relief of the late filing penalty assessed for the Tax period December 31, 20XX as we meet all three requirements for the reasonable cause test.

Certain small partnerships (with 10 or fewer partners) meet this reasonable cause test if:

1. All partners are individuals.
2. All partners have timely filed income tax returns fully reporting their shares of the partnership's income, deductions, and credits.
3. The partnership has not elected to be subject to the rules of consolidated audit procedures.

(Rev. Proc. 81-11, 1981-1 C.B. 651; Rev. Proc. 84-35, 1984-1 C.B. 509)

IRS wrote back saying balance due = ZERO.

[S T]

Same here

Jesse, same here, I received one of those letters on one of my partnerships for 2006. IRS removed the assessment.

Caution, though, California does not acknowledge the same Ruling as Feds, so we were not able to remove the additional assessment.

Everyone should also look and research their client's State Laws!

Sandy

[zeros]

Penalty for Late Filing-"S" Corp also

I recently filed a S Corp return with all zeros. He had an extension to 9/15/08. Will there be a penalty for filing this return late?