IRS Gives Partnerships, REMICs, Certain Other Entities More Time

Chris Gaetano
Published Date:
Dec 1, 2017

The IRS has given certain entities a little more time on their taxes to account for recently implemented due date changes.

Under Notice 2017-71, the IRS will treat acts performed by a partnership, real estate mortgage investment conduit or other entity that properly filed a Form 1065 between Dec. 31, 2015 and Jan. 1, 2017 as timely. This is provided that the entity took action by the date it would have been timely had the Surface Transportation Act and Veterans Health Care Choice Improvement Act of 2015 not changed the due date for such returns.  However, the entity will be liable for any interest due under section 6601 from the date prescribed for payment until the date the payment was actually made.

The legislation had generally shifted due dates for partnership returns from April 15 to March 15. The IRS said that this had the effect of making certain actions late, even though they had been considered timely before the act passed, which led to penalties leveled against the entities that took them. 

An entity that has already been assessed a penalty for failure to timely file a return that is deemed timely filed under this notice can expect to receive a letter within the next several months notifying it that the penalty has been abated.

For other acts deemed timely, such as elections, the IRS advised that entities file their returns consistent with the treatment of the acts as being performed timely, and should not need to take further action to obtain relief, unless they are contacted by the IRS. If a penalty covered by this new guidance has not been abated by Feb. 28, 2018, the entity is advised to contact the IRS. 

Taxpayers who qualify for relief under this notice will not be treated as having received a first-time abatement under the IRS’s administrative penalty waiver program.

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