Small Business Taxes & Management

Special Report

Penalty Relief for Late-Filed Partnership Returns


Small Business Taxes & ManagementTM--Copyright 2017, A/N Group, Inc.


The IRS has issued guidance (Notice 2017-47) providing penalty relief for certain partnerships that did not file the required returns by the new due date for tax years beginning in 2016. Partnerships file Form 1065 or Form 1065-B or request an automatic extension by filing Form 7004.

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changed the date by which a partnership must file its annual return. For calendar year partnerships, the due date for filing the annual return or request for an extension changed from April 15 (April 18 in 2017) to March 15.

Many partnerships filed their returns or their extension requests for tax year 2016 by the April deadline, and if not for the Surface Transportation Act, these returns and requests for extension of time to file would have been on time.

Notice 2017-47 provides penalty abatement for these partnerships, provided:

(1) the partnership filed the required returns (Form 1065, 1065-B, 8804, 8805, 5471) with the IRS and furnished copies to the recipients (as appropriate) by the date that would have been timely (April 18, 2017 because of a Saturday and legal holiday in D.C.), or

(2) the partnership filed Form 7004 to request an extension of time to file by the date that would have been timely (April 18) and files the return by the 15th day of the ninth month after the close of the partnership's taxable year (September 15, 2017 for a calendar-year partnership).

This relief will be granted automatically for penalties for failure to timely file Forms 1065, 1065-B, 8804, 8805, 5471, for which the due date is tied to the due date of Form 1065 or Form 1065-B. Partnerships that qualify for relief and have already been assessed penalties can expect to receive a letter within the next several months notifying them that the penalties have been abated. For reconsideration of a penalty covered by Notice 2017-47 that has not been abated by February 28, 2018, contact the number listed in the letter that notified you of the penalty or call 800-829-1040 and state that you are entitled to relief under Notice 2017-47. Taxpayers who qualify for relief under Notice 2017-47 will not be treated as having received a first-time abatement under the IRSís administrative penalty waiver program.

Additional details are available in Notice 2017-47.

The new deadlines were provided in the instructions for Form 1065 and the instructions for Form 1065-B.

For calendar year partnerships, the due date for filing a return after receiving an extension is Sept 15. The IRS projected that corporations and partnerships will file almost 6.9 million extension requests during 2017 The IRS expects to receive more than 4 million partnership returns during 2017.


Copyright 2017 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536

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--Last Update 03/01/17