Penalty Relief: New IRS Guidance Helps Many Partnerships.

• Author: Josephs, Stuart R.
• Position: Fed Tax

IRS Notice 2017-47 (IRB 2017-38, Sept. 18, 2017: provides penalty relief to partnerships that filed certain untimely returns or untimely extension requests to file those returns for their first tax year beginning after 2015, by the 15th day of the fourth month following that tax year's close.

Background

The 2015 Surface Transportation and Veterans Health Care Choice Improvement Act (the Act), P.L. 114-41, amended IRC Sec. 6072 to change the date by which a partnership must file its annual return. Its due date changed from the 15th day of the fourth month following the tax year's close, April 15 for calendar-year partnerships, to the 15th day of the third month following the tax year's close, March 15 for calendar-year partnerships.

This new due date applies to partnership returns for tax years beginning after 2015. (See October 2015 California CPA, Page 23.)

Partnerships filing the following types of returns are affected by the Act's amendment:

* Form 1065, U.S. Return of Partnership Income; and

* Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

The partnerships also may file:

* Form 8804, Annual Return for Partnership Withholding Tax (Sec. 1446); and

* Form 8805, Foreign Partner's Information Statement of Sec. 1446 Withholding fax. These forms, generally, are due to the IRS on the same date as Form 1065 or 1065-B. Form 1065 filers must furnish their partners with Schedules K-1, "Partner's Share of Income, Deductions, Credits, etc." by Form's 1065's due date. Form 1065-B filers must furnish their partners with Schedules K-1 by the first March 15 following the partnership's tax year's close.

Form 8804 filers required to file Forms 8805 also must furnish their partners with their respective copies of Forms 8805 by Form's 8804's due date.

Some partnerships also must file additional returns, such as Form 5471, "Information Return of U.S. Persons With Respect to Certain Foreign Corporations" by the due date of Form 1065 or 1065-B.

Six-Month Extensions

Partnerships can obtain a six-month extension to file Forms 1065, 1065-B or 8804 by filing Form 7004, "Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns" by the statutory due date of those returns. Partnerships receiving an extension to file Form 1065 receive a concurrent extension to furnish Schedules K-1 to their partners.

Also, partnerships receiving an extension to file Form 8804 receive concurrent extensions to...