LLC Questions

[OldJack]

That's what the Rev Proc says. No penalty for not filing a 1065, if there are 10 or fewer partners.

If there is no penalty, why bother.

You also quoted the following in the "Got Audit, Please Help" thread:
Our job is to perform the service of preparing a correct tax return.

Bees, I guess preparing a 1065 correct tax return doesn't count in your job? Or, maybe you were only talking about preparing a correct individual tax return?

[Bees Knees]

Bees, I guess preparing a 1065 correct tax return doesn't count in your job? Or, maybe you were only talking about preparing a correct individual tax return?

Read the Rev Proc on the subject. It says Congress did not want to burden partnerships with 10 or fewer partners with the consolidated audit rules. As long as each individual partner properly reports his or her share of allocated income, deductions, and credits, then there is no penalty.

You think preparing a 1065 is the only way to file a correct tax return? Then why did Congress say it wasn't necessary?

[Unregistered]

You think preparing a 1065 is the only way to file a correct tax return?

The didn't say it was ok to not file a 1065 return. They simply said as you quote "burden... consolidated audit rules" and "no penalty". Yes... there is still a legal entity called a partnership that is required to file a tax return... to be correct about it.

[outwest]

To read the IRS position on all of this..

here is a really thorough discussion of the issues in the context of automatic relief.

http://www.irs.gov/pub/irs-wd/0135029.pdf