It was a final return of the partnership and I showed the end of the year as November 18, 2020.
I have filed an extension for the partnership March 10 by certified mail and was sure that everything is fine. Shortly, after filing the extension on March 19, 2021 I have filed the return.
IRS issued a notice for penalty of $840 stating that the return is 2 months late (partnership
had 2 partners). They say that I were suppose to file the extension February 15, not March 15,
due to the short year of the partnership.
Is there any way to argue with them about this penalty.
Thank you for any advice.
I had that issue with an S corporation almost 20 years ago when i was first starting out. Yes, they are correct. The extension had to be filed within 2 1/2 months after the closing date. If the partnership didn't have that type of penalty in the past 5 years, you should be able to get it waived. Or you can use the first time penalty waiver (if they haven't had that before)
Thank you guys for your help.
Another situation: let say that the partnership's return showed the end of the year the June 2021.
How the 2 1/2 after the clothing date rule would work in these situation?
Shouldn't we go back to understanding: " Generally, ........it is the 3rd month of the calendar year next
to the year of final return?"
"Another situation: let say that the partnership's return showed the end of the year the June 2021"
You are confusing two different things: End of Year (fiscal) and Short Year (special reporting).
The IRS explains it to you here:
"Level Up" is a gaming function, not a real life function.