Notice 2017-47 Offers Penalty Relief to Partnerships Tripped up by New Filing Deadline

September 1, 2017


This Notice was updated on September 12, 2017, to also apply to real estate mortgage investment conduits (REMICs).

On September 1, IRS issued Notice 2017-47 granting penalty relief to partnerships that missed the new filing deadline imposed by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 . The relief is automatic.

Section 2006 of the Surface Transportation Act amended IRC section 6072 to provide that partnership tax returns would be due the fifteenth day of the third month following the close of the taxable year (March 15 for calendar year taxpayers), instead of the fifteenth day of the fourth month following the close of the taxable year (April 15 for calendar year taxpayers). The change was to apply for taxable years beginning after December 31, 2015. Because a number of partnerships were apparently unaware of this change and missed the deadline, IRS Notice 2017-47 grants relief.

The relief provides that partnerships that filed returns that would have been timely under the old law (including extension requests) will not be assessed penalties for their late filing. This relief applies to Forms 1065, 1065-B. 8804, 8805, and 5471. This means, for example, that calendar-year taxpayers that filed their partnership returns or extension request by April 18, 2017, (and file any extended returns by September 15) will not be liable for a penalty. If the partnership filed a Form 1065-B and was required to file its required Schedule K-1s by March 15, it must have done so to qualify for relief.

The relief is to be automatically granted. Taxpayers who already received a notice of a penaty are supposed to receive a letter notifying them that the penalty has been abated. But those who have been assessed penalties can call the number listed in the penalty notification or call (800) 829-1040 and state that they are entitled to relief under Notice 2017-47. This relief will not be treated as first-time penalty abatement.

 

Want to view entire articles or watch the videos?