Penalty non-filing 1065

[Gretel]

A previous post states that late filing of form 11120S now has a penalty.

Is there also a penalty now for non-filing of form 1065, 2 partners, if all income is reported on 1040?

[BHoffman]

Rev Proc 84-35

There sure is - $50 per K1. But you can get out of it:

"The partnership meets the criteria specified in Rev. Proc. 84-35, which says in part:
“A domestic partnership composed of 10 or fewer partners and coming within the exception outlined in section 6231(a)(1)(B) of the Code will be considered to have met the reasonable cause test and will not be subject to the penalty imposed by section 6698 for the failure to file a complete or timely partnership return, provided that the partnership, or any of the partners, establishes, if so required by the Internal Revenue Service, that all partners have fully reported their shares of the income, deductions, and credits of the partnership on their timely filed income tax returns.”

[solomon]

Agree with the Rev. Proc. However, when penalty is unavoidable, under the Mortgage Forgiveness Act the penalty is now $85 per partner extended from 5 months to 12 months. This is effective for a return filed after Dec. 20, 2007.