Partnership filed late? Ask to remove the penalty
Your partnership's Form 1065 went in late, and the IRS charged a penalty per partner. The partnership late filing penalty is $255 per partner per month for a return due in 2026, for up to 12 months. Small partnerships have their own way out, and a tax pro can ask for you.
- 10 partners
Rev. Proc. 84-35 covers partnerships with 10 or fewer partners who all reported their share on time.
many family and small-business partnerships qualify without any other reason.
check the four tests below before you pay.
- $255
The charge is $255 per partner per month for a 2026 due date.
four partners and two months late is $2,040.
file the late Form 1065 now to stop the count.
How it's figured
Take a four-partner bakery LLC. Its 2025 Form 1065 was due March 16, 2026, and was filed 2 months late. The bill is $255 times 4 partners times 2 months, or $2,040.
The Form 1065 instructions set the rule. It is a flat charge for each month or part of a month, up to 12 months. That charge is multiplied by every person who was a partner during the year. It also applies to a return filed without all the required information.
| Return due date | Charge per partner, per month |
|---|---|
| After 12/31/2025 | $255 |
| In 2025 | $245 |
| In 2024 | $235 |
| In 2023 | $220 |
| 2021 to 2022 | $210 |
First-time removal for businesses
Partnership late filing is on the IRS administrative relief list. The partnership needs 3 earlier years of on-time Form 1065 returns and no penalties in those years.
The two business conditions apply too: no more than 3 late deposit waivers in those years, and no deposit penalty for skipping EFTPS. One phone call can settle it, using the first-time script.
The letter
On Form 843, line 6 is section 6698, the partnership late filing rule. In the letter, name the rule you are using: first-time removal, or the small partnership rule below.
Small partnerships: Rev. Proc. 84-35
The IRS failure to file page says a good reason is presumed for small partnerships that meet all four tests:
- 10 or fewer partners. A married couple filing jointly counts as one.
- Each partner is a person, not a company or a nonresident alien, or a dead partner's estate.
- Each partner's share of income, deductions and credits is the same for every item.
- Each partner reported their share on a tax return filed on time.
The bakery LLC meets all four, so it can use this rule even without a clean 3-year record. S corps cannot use it; see the S corp page. Payroll penalties are on the Form 941 page, and the general rules are at IRS penalty removal.
Frequently asked questions
How much is the 1065 late filing penalty?
$255 per partner per month for returns due in 2026, for up to 12 months. A 4-partner LLC filed 2 months late owes $2,040.
Does a husband and wife count as two partners?
For the small partnership rule, a married couple filing jointly counts as one partner. For the penalty math, the IRS counts each person who was a partner.
Do I need to file Form 843 for Rev. Proc. 84-35?
You can call or write. Say the partnership meets the four tests of Rev. Proc. 84-35, and list the partners.
Is an LLC taxed as a partnership covered?
Yes. An LLC that files Form 1065 is treated as a partnership for this penalty and for the relief.
Sources
- Instructions for Form 1065, irs.gov, checked October 2026.
- Failure to file penalty (partnership returns), irs.gov, checked October 2026.
- Administrative penalty relief, irs.gov, checked October 2026.
What to do now
Talk it through by phone
Your partnership has a late filing penalty, and it may qualify for the small partnership rule or first-time removal. A licensed tax professional can check both and ask the IRS to remove it for the partnership. Call now with the CP notice and the partner list.
A licensed tax professional answers during business hours. The call costs nothing, and you are not signing up for anything. Form 843 Help is a private service, not the IRS, and your details go to one tax professional only.
- You call during business hours and say which penalty and tax year you are looking at.
- A licensed tax professional reads your notice with you and checks first-time removal and reasonable cause.
- You hear the options and the fee for filing before you agree to anything.
Or send the details about your penalty
You would rather write than call about your penalty for . A request that names the wrong rule or misses a year can be turned down, so a licensed tax professional checks it first. Send the tax year, the penalty amount and the number of partners.