[almasy]

NINJA Question –

I had a few questions about the following question found in the Entity Taxation section under Partnerships:

Manny, Moe, Matilda and Shep are partners in a manufacturing business. The partnership is on a calendar tax year. They were so busy making money that they forgot to file their 2016 personal and partnership tax return on a timely basis. They finally filed them on July 31, 2016. What is the correct penalty the partnership will be assessed for late filing of the partnership return?

A. $50 per partner times three months
B. $89 per partner times four months
C. $195 per partner times four months
D. Penalties are assessed against the partners, no the partnership.

Answer C. The penalty for late filing is $195 per partner for each month, or part of a month, that the return is late, up to 12 months. The penalty in this case would be $3,120 for 2016 ($195 x 4 partners = $780; $780 x 4 months = $3,120).

I’m not sure if I’m missing something, the question hasn’t been updated or if I’m mixing up rules. Under the new “15th day of the third month” partnership tax year shouldn’t the answer be five months?
March (partial) 1st month
April 2nd month
May 3rd month
June 4th month
July 5th month

On the other hand is it because this question is for 2015 that April 15 is still the filing due date? If so, is this something I still need to know for REG?

[A]

Remember that partnerships are pass-through entities. The members -not the partnership- are responsible for paying the taxes and penalties/interest. While the p'ship return is due in March, the members' individual returns are not due until April.

B - 77 (2.27.16)
A - 81 (4.18.16)
R -
F -

Roger Review + Ninja MCQs

[almasy]

I thought that the partners' due date would be irrelevant since the question specified the penalty for the late filing of the partnership return. Is it because the partnership return is informational that the clock only starts ticking on the partners' due date?

[Author]

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