1065 late filing penalty

[nkustura]

I have a client who filed his 2010 partnership return late. The IRS sent him a letter with assessed late filling penalties ($195 per month multiplied by number of partners). Under IRC 6231(a)(1)(B), the partnership meets all the test for abatement of the penalties, except the one that personal returns were TIMELY filed. In fact, personal returns were filed late as well. Partnership didn't have a profit in 2010, so no tax was due on the personal returns related to the K-1 information.

Is there any way to waive these penalties even if personal returns were not timely filed?

As always, thank you for your help.

nk

[erchess]

I have

no experience with entity penalties other than late filing for S Corp Status which is an issue where the IRS attitude can only be described as friendly. As to your case, we both know that your clients don't meet all the criteria for your appeal to be automatic. You'll have to look at the actual code or talk to someone who has (NYEA where are you?) to see if there's any hope.

[ttbtaxes]

1) Was there activity in partnership during the year? If not, there is an exception in the Code regardless the number of partners.

2) I've found that in many instances I've been able to get the IRS to agree to one mulligan for late filing if it is their one and only. No code section to cite. It was simply begging for mercy, sterling track record, inadvertant omission rather than a willful attempt. Yada, yada.

[oceanlovin'ea]

That is true. IRS will waive the penalties for the first time offense. So if it has not happened before or it is a new entity, they will waive it. When you call in to PPS, they will usually just do the waiver while you are on the phone.

Linda, EA