Discussion:1065 extension
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Discussion Forum Index --> Advanced Tax Questions --> 1065 extension
Discussion Forum Index --> Tax Questions --> 1065 extension
| 2 January 2008 | |
| Client and wife are partners in LLC for past 7 years or so. I file extension form 7004 every year without problem. They just received a penalty letter from IRS for late filing. Told client to call IRS and find out why. Claims they told him there is no extension for 1065. Before I get more involved, has anyone know anything about this? Thanks. | |
Death&Taxes (talk|edits) said: | 2 January 2008 |
| Make sure IRS did not say "there was no extension on record for their 1065." If there is no extension, then how can there be a penalty? Right now I am filing for relief for clients in England with a h/w partnership here in the States, their former residence. | |
| 2 January 2008 | |
| I understand PBinNJ to be saying that he correctly filed an extension on Form 7004. Then he filed the return after the original due date, but before the extended due date.
Paul, The IRS loses extensions all the time, or gets mixed up when the due date falls on a weekend or holiday. When this happens, I just send them a nice letter with a copy of the extension that was filed on the client's behalf. Just explain that you filed the extension on such-and-such date which was on or before the due date and direct their attention to the enclosed copy of the extension. Respectfully request that the penalties be abated, then include an "affidavit" that says "Under penalty of perjury I declare that the statements above are true and correct to the best of my knowledge." Sign and mail. It's your word against theirs and you have submitted a sworn statement that you filed the extension. That should cover it. It would be even better if you have a date-stamped certified mail receipt that shows the date you mailed the extension. I don't know what the practice is of most pros on this forum is, but I don't even mail a Christmas card to the IRS without using Certified Mail with return receipt. Further, I enclose a cover letter that lists the contents of what I'm mailing and a statement that requests that the IRS date-stamp the cover letter to acknowledge receipt of the item(s) and mail the date-stamped cover letter back to me in a stamped, self-addressed envelope that I include for that purpose. The cover letter also includes the certified mail ID number that is found on the certified mailing form, to prove exactly what documents were associated with that mail receipt. It's a lot of trouble, yes, but it's bullet-proof. You shouldn't have any trouble getting the penalty abated under the circumstances you indicate. | |
| 2 January 2008 | |
| On another reading of Paul's post, I see what you are talking about Death&Taxes. That is an odd response from the IRS, or a perhaps a misunderstood communication. | |
| 2 January 2008 | |
| CPAdavid - please, please, please tell me you were just joking about sending a Christmas Card to the IRS :-) | |
| 3 January 2008 | |
| Belle,
Ok, I'll admit it, I was just kidding. If I did, they'd probably send me a penalty notice for failing to send one last year. | |
| 3 January 2008 | |
| Don't forget to sign the card to avoid the penalty as the "paid preparer". | |
| 3 January 2008 | |
| It's unfortunate to have to pay the outrageous rate for certified mail (return receipt requested) that you have to pay today (plus the time to put it together), but I agree with CPAdavid. Sometimes, if it's not too important, I will use a proof of mailing (little white form usually in lobby). This is a weird item the P.O. offers that just proves you mailed the document. On my letter, I will put that I used Proof of Mailing, in the hopes that it will not be "accidentally" lost. It does not prove receipt, but it's considerably cheaper when it can be used. Whenever possible, my clients mail their own extensions (and pick up the cost and hassle). | |
| 3 January 2008 | |
| Seems I recollect a rev proc 84-35 that gits you outta them late partnership penalties jest bout every time. | |
| 3 January 2008 | |
| Thanks Aunt Emmy for bringing 84-35 to our attention. That's great to know. I guess the only small annoyance could be that the IRS could demand proof that all the partners reported all items of partnership income on their personal returns.
In Paul's case above there shouldn't be a penalty because the extension was timely. I'd still be inclined to argue that it was filed timely rather than rely on 84-35. But is sounds like either way should work. I agree with CrowJD that it is unfortunate to have to bear the expense of certified mail plus the considerable time to put it all together. I try to file as many extension requests and tax returns as possible electronically. When clients are mailing their own returns/extension requests I advise them to use certified mail (most probably don't). When mailing Form 1023 I insist on mailing the application myself and I add $100 to the bill to cover certified mailing procedures. | |
