Discussion:Late 1065 Penalty
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Discussion Forum Index --> Tax Questions --> Late 1065 Penalty
| 24 March 2007 | |
| Anyone seen this penalty assessed? I have a two member partnership where a buy-out of the 49% partner occurred in Feb 2006. | |
| 24 March 2007 | |
| Yes, I have seen it about 6 years ago. Something like $100 a month per partner. Penalty was huge. | |
| 24 March 2007 | |
| I have been successful in having the IRS waive this penalty. You must show that each member/owner correctly reported the 1065 results on their return and filed within their filing dates (including extensions).
No damage, no penalty. | |
| 24 March 2007 | |
| I have failed to note a technical termination date
on a partnership and filed by the usual due date (4-15) for a calendar year Pship in a case where the late fee might have been assessed and the data was not ready to make a filing within 3.5 months of the technical termination. (Hopefully this makes sense). One of my rare faux pas with the tax laws. | |
| 24 March 2007 | |
| Willy, Service Center Advice 200135029 has a very good discussion of abatement of penalties for filing partnership return late as well as cites to Rev Proc 84-35 and Rev Proc 81-11 which says, in part, "A domestic partnership composed of 10 or fewer partners and coming within the exception outlined in section 6321(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." -- Larry Hess, CPA, Albuquerque, NM - Talk to me
I just added a link to the SCA document on the IRS website. | |
Roaringcpa (talk|edits) said: | 28 May 2009 |
| What happens if the existence of the partnership was in question? Founder filed all business activity on Schedule C. Two or three years later, he had to make payments to another person for his "half of the partnership" (language according to the settlement agreement)
Would this be reasonable cause? Is there anyway to determine if there is reasonable cause BEFORE filing the partnership returns for the last three years (and amending the founder's personal returns)? | |
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