Accountants Who Come To Us For Guidance
David M. Kaufmann, CPA
2831 Wyecliff Way
Highlands Ranch, CO 80126
PO Box 632285
Highlands Ranch, CO 80163-2285
Note: This is a complicated subject. We will only
touch on some topics. We recommend that you talk these issues over
with an attorney and a CPA.
What is the penalty for
failure to file a partnership tax return?
What happens if the IRS sends me a notice that I have
failed to file a partnership tax return?
Can the partnership get out of the failure to
file a partnership tax return penalty?
Are there any special cases
of reasonable cause for partnership tax returns?
What should you do if the IRS tries to hit
you with the failure to file a partnership penalty?
Don't Pay This Penalty Without Talking To Us First!
$89 per partner per month for tax years ending on
December 31, 2009. Thus, if a 2 person partnership was 3 months late, the
penalty would be $534 ($89 x 2 x 3).
For tax years ending after December 31, 2009, the
penalty for failure to file a partnership tax return is $195 per partner per
You better respond as soon as possible. If you want to
fight the IRS on this, do it quickly. If you don't want to fight the IRS,
pay the penalty as soon as possible.
If the IRS has not processed your response to their first
notice within 30 days of mailing the notice, you are likely to receive a
letter requesting payment of the penalty with the intent to levy your
Realize that the IRS may not be speedy in processing your
If you can prove that there is reasonable cause, you
can get the failure to file a partnership tax return penalty abated
Typical examples of "reasonable cause" would be health
issues or natural disasters.
There should be no failure to file penalty for "small
partnerships" defined as follows:
- There are 10 or fewer partners.
- All items of income, deductions, credits, etc from
the partnership have been properly reported on a timely basis on the
partners' individual tax returns.
- Partnership allocation percentages are the same for
all partnership tax attributes.
What should you do
if the IRS tries to hit you with the failure to file a partnership penalty?
- Respond quickly. If there is a phone number on the
IRS notice, call it ASAP. Let the IRS know that you are responding in
writing, and what your argument is. If you are real lucky, the IRS
employee will abate the penalty right then and there. If you are not that
lucky, the IRS has been informed that you are working on the issue.
- Respond in writing if needed. If the small
partnership exception (10 or fewer partners, as described above), mention
that. Send this letter certified for proof of mailing.
- If the IRS sends an intent to levy letter to you
before they respond to your letter (point 2), call the IRS to let them
know that you have previously responded, and that they should delay any
legal action until you have a chance to review their response to your
Don't Pay This Penalty Without
Talking To Us First!
If you need assistance with this, [after all, this is
what we do] contact us at 720-493-4804.
If we work together on this, our price would be a
percent of what the penalty would be, and we would give you a full refund,
if we are not able to reduce or eliminate the penalty.
If you have questions about this, do not hesitate to contact us
Circular 230 Notice:
The information contained here are simplifications of complex subjects.
We recommend that you talk to a CPA about this issue.
To ensure compliance with requirements imposed by the IRS, we inform you that
(i) any tax advice contained in this communication (including any attachments)
was not intended or written to be used, and cannot be used, for the purpose of
avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing
or recommending to another party any transaction or matter addressed herein.