Late filing penalty for LLC

Forum|Forum|3 years ago
April 6, 2023
2 replies
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My husband and I had an LLC that we closed in September. Our fiscal year was Jan-Dec.

We filed the final 1065 the first part of March. Tried to do it in January but Turbo tax didn't have all the forms yet.

We just got a notice from IRS saying that we owe $1260 for late filing. Why would this be considered late?

At top of form it shows the tax period as September 30, which doesn't make since to me unless they thought our fiscal year ended in September.

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Best answer by MinhT1

When you close the LLC, its tax year ends. And the law says that you must file a final form 1065 within 2.5 months of the year end date. So if you close your LLC on September 30, 2022, the final tax return is due on December 15, 2022.

If you actually filed in the first half of March 2023, the return was late by three months or part-months.

The penalty for late filing is $220 for each month or part-month the return is filed late (up to 12 months) multiplied by the number of members. So for your case, it is $220 x 3 x 2 = $1,320.

If this is the first time you incur this penalty, you can write to the IRS asking for a first time abatement of the penalty.

Carl11_2

Employee

Per the instructions for form 1065 at https://www.irs.gov/pub/irs-pdf/i1065.pdf

On page 6:

When To File
Generally, a domestic partnership must file Form 1065 by the 15th day of the 3rd month following the date its tax year ended as shown at the top of Form 1065.

So if you terminated/closed the partnership in Sept, the final return was due by Dec 15th.

Then on page 7:

A penalty is assessed against the partnership if it is required to file a partnership return and it (a) fails to file the return by the due date, including extensions; or (b) files a return that fails to show all the information required, unless such failure is due to reasonable cause. The penalty is $220 for each month or part of a month (for a maximum of 12 months) the failure continues, multiplied by the total number of persons who were partners in the partnership during any part of the partnership's tax year for which the return is due.

MinhT1Answer

If you actually filed in the first half of March 2023, the return was late by three months or part-months.

The penalty for late filing is $220 for each month or part-month the return is filed late (up to 12 months) multiplied by the number of members. So for your case, it is $220 x 3 x 2 = $1,320.

If this is the first time you incur this penalty, you can write to the IRS asking for a first time abatement of the penalty.

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