Small Partnership Exemption

[John of PA]

Has anyone heard of the "Small Partnership Exemption". It is an exemption from the late filing penalty for a 1065 of a very small business. I was wondering if anyone has had success getting the penalty excused under this exemption.

[Bird Legs]

Small Partnership exemption

John there was a post on this about 1 to 2 weeks ago. Yes, there is an exemption
on late filing penalty if there are fewer than 10 partners. See page 20-1 of TTB.
Para titled: Penalties.

[BOB W]

It is .......

..... very easy to remove. Just write a note on the correspondence.

[JON]

10 or fewer

"individuals" as partners and they included the correct amounts on their "timely" filed returns.

[BOB W]

I don't have .....

.... my TTB with me or I would have found the correct answer. I just spent 15 minutes on the IRS Web site and still could not find the correct wording for your reply to a notice of late filed 1065.

But I do know you have to state that there are 10 or fewer partners and they all included all their income on a timely filed 1040.

When I zero in on that correct terminolgy I'll post it here.

[cpadan]

..... very easy to remove. Just write a note on the correspondence.

It has been done it with a POA and a phone call to the IRS.
Dan

[rosieea]

Here's A Sample

"The above referenced Notice assessed a late filing penalty of $1000.00 on xxx Limited Partnership. We paid this penalty within the time period prescribed by the notice. We now request a refund of this penalty on basis of reasonable cause, as provided in Revenue Procedure 84-35, as follows:

xxx Limited Partnership had fewer than 10 partners during the tax period upon which the penalty was imposed.

Each partner fully reported his or her share of income, deductions, and credits on a timely filed return.

Each partner is a natural person.

Each partner’s share of income is the same as his or her share of every other item.

In view of the foregoing, and as provided in Revenue Procedure 84-35, we respectfully request abatement of the late filing penalty assessed in your Notice, and we further request that a refund in the amount of $1000.00, submitted in response to the Notice, be provided.

Thank you for your attention to this matter.

Sincerely,"



The penalty was abated and refunded in this case.

[John of PA]

Thank You Everyone

Thank You Everyone. It sounds like the 1040 has to be filed on time, which is not the case here.

[BOB W]

Yep,

.... that was what I was looking for, the official response. But as CPADAN said a simple phone call can do it (on some occassions) and writing simular words on the notice will work also.

After the payment was made, I guess the more official version should be done.


xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx
xxx Limited Partnership had fewer than 10 partners during the tax period upon which the penalty was imposed.

Each partner fully reported his or her share of income, deductions, and credits on a timely filed return.

Each partner is a natural person.

Each partner’s share of income is the same as his or her share of every other item.

In view of the foregoing, and as provided in Revenue Procedure 84-35, we respectfully request abatement of the late filing penalty assessed in your Notice, and we further request that a refund in the amount of $1000.00, submitted in response to the Notice, be provided.