Posts Tagged ‘tax penalty’
Late Filing Penalties Increase for Failure to File a Partnership or S Corporation Return
For many years the penalty for failure to file a federal partnership return was $50 per partner per month for a maximum of 5 months. Over the last couple of years, similar penalties have been extended to S Corporations, and the penalty rates have been creeping up.
The current federal penalty rate is $89 per partner or shareholder per month for a maximum of 12 months. The Worker, Homeownership, and Business Assistance Act of 2009 includes a provision to increase the penalty again. The new penalty rate will be $195 per partner or shareholder per month for a maximum of 12 months for a tax year beginning after December 31, 2009. The maximum penalty now will work out to $2,240 per partner or shareholder. This provision is projected to raise over $1.2 billion over the next 10 years.
Recently signed California legislation, SB 401, also increases the partnership late filing penalty and adds a new late filing penalty for S corporation returns. The FTB assesses the late filing penalty if a partnership or LLC, treated as a partnership, files a late or incomplete return. The current late filing penalty is $10 per partner, for each month or fraction of the month the return is late or incomplete, to a maximum of five months. Beginning with returns required to be filed after January 1, 2011, the penalty will increase to $18 per partner or shareholder for a maximum of 12 months.
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