for S-Corp, Partnership Returns
for S-Corps, Partnerships, and Fiduciaries failing to file
returns have been steadily rising, but starting in tax year
2010 penalties for S-Corp, Partnership, and Fiduciary filing
late returns increased to $195.
The IRS states that for returns on which no tax is due, the
penalty is $195 for each month or part of a month (up
to 12 months) the return is late multiplied by the
total number of persons who were shareholders in the
corporation during any part of the corporation's tax year for
which the return is due.
The penalty may also be charged
if the return does not show all the information required.
For example, if a S-Corporation fails to file its 2010 return
(including a Schedule K-1 to each shareholder) on time the
penalty could be as much as $2,340
per shareholder per year ($195 per shareholder for
the maximum of 12 months).
These failure-to-file penalties do not include tax that is due
or penalties for tax that is due, but not paid on time. Add in
the fact that the penalty isn't tax deductible on your tax
returns the following year and you've got yourself a double
If the partnership or S-corporation can show that the failure
to file on time was due to "reasonable cause", the IRS might
provide relief. Be advised however, that if the partnership or
S-corporation has established a pattern of failing to file in
the past, it's unlikely that the IRS will be sympathetic.
Why take a chance? If you need assistance filing your S-Corp,
Partnership, or Fiduciary return, call us today.
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If you have any questions about
S-Corp, Partnership, or Fiduciary return, please give us a call at 301-657-8080.
As always you can call our offices if you have any
questions about these or any other accounting, tax,
financial planning or insurance related issues, at 301-657-8080.
Regards, Paul Sullivan, CPA
President, Sullivan & Company