Penalty for not giving Sch K-1 to partner?

[KJ Judd]

I have a situation where a minority LLC member (10%) parted company with rest of the owners under bad terms. Various lawsuits in past years between my client & other owners.

We haven't been able to get a copy of her Schedule K-1 from the partnership so I can complete her return. As of now, the partnership return has not been filed although it may be done. Is the partnership subject to penalty for not providing a Schedule K-1 by October 15th?

Any suggestions other than filing the return as is by October 15th and then file an amended when we get the Schedule K-1? (Based on prior years, the Schedule K-1 will probably have a loss.)

[Burke]

Partnership will be assessed a penalty for any late filing, amount calculated and applied per partner.

[Black Bart]

We haven't been able to get a copy of her Schedule K-1...Is the partnership subject to penalty for not providing a Schedule K-1 by October 15th?

I don't know if there's a penalty for not sending one to a partner by 10-15, but if there is I've never heard of one being assessed against anybody. They aren't required to be sent certified and if they claimed they mailed it, then I don't see how you could prove otherwise. Even if you could, worst case for them would probably be a $25-50 fine which they might feel was worth it to gouge their enemy. If not received by 10-15 she could contact IRS and they might call and jack 'em up -- they do it for W-2s and it's the same principle.

Any suggestions other than filing the return as is by October 15th and then file an amended...

Here's something from IRS website on a "form 8082" for estimated K-1 income. Check that out -- maybe it'll help.

https://www.irs.gov/newsroom/article/0,,id=122581,00.html

[solomon]

Partnership will be assessed a penalty for any late filing, amount calculated and applied per partner.

From Rev. Proc. 84-35

A domestic partnership composed of 10 or fewer partners and coming within the exceptions 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 requested 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.