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In anticipation of the upcoming May 15th deadline, we've compiled a list of the most common questions here.
In anticipation of the upcoming May 15th deadline, we've compiled a list of the most common questions here.
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- Partnership federal extension filed by mistake?
Partnership federal extension filed by mistake?
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Kim
Level 1
05-11-2023
01:37 PM
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I filed a 4868 Extension by mistake. This partnership has no operations but has to file a CA return. When I e-filed the CA extension, I accidently checked federal too. Since they have no federal filing requirement, what do I do? Write a letter to IRS explaining or just do not file a 1065?
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TaxGuyBill
Level 15
05-11-2023
03:41 PM
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Is it just a zero return (zero income and zero expenses)? If you need to fill things out for a California return, why not just file the zero Federal return?
At any rate, you wouldn't need to file a Federal return, even if an extension was filed. But if it takes almost zero work, I think I would do it anyways.
abctax55
Level 15
05-11-2023
05:05 PM
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If you efiled the Federal extension, there must be a FEIN.
If the IRS issued a FEIN they generally state the necessary filing requirement in the letter showing that FEIN. They are most likely gonna' be looking for a F 1065.
And when/if they show up & ask for it, it may not necessarily politely. IF there's no income, you'd be able to then explain it to them and have any of the (possibly) proposed penalties abated.
IMHO, why take the chance of your client getting a nasty-gram & perhaps being upset with you when you could head this off by just filing the return? Especially since you've already incurred the REP fee (if you aren't on unlimited).
"*******Tax software is no substitute for a professional tax preparer*******
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Kim
Level 1
05-11-2023
05:11 PM
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No, client is requesting all elections and Froms k-2 and K-3 be completed since they have assets. However, there preference is NOT to file.
TaxGuyBill
Level 15
05-11-2023
06:07 PM
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@Kim wrote:
No, client is requesting all elections and Froms k-2 and K-3 be completed since they have assets.
Interesting. I'm probably just being dense, but what parts of K-2/K-3 apply with no income or deductions? And what elections would be made?
As I mentioned before, if you don't need to file, the extension doesn't change that. So if the taxpayer doesn't want you to file, then don't. But you may consider charging another fee if the client asks you about any IRS notices that MIGHT come for not filing.
Out of curiosity, is this going to be a business, or is it just one of those things that people just put some joint ownership of property and threw it into an LLC?
Kim
Level 1
05-11-2023
06:16 PM
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The CA partnership is in construction of an apartment complex. Therefore, they have to file CA regardless of no operations. I just did not want to argue with the client. I agree that the filing of K-2/K-3 and elections are not required. I think best option is just not to file. If I get a notice and will explain there were no operations. Make sense. I was just trying to find support I could send to client that the federal return did not need to be filed even though I sent an extension by mistake. I am being challenged by a large investor.....
TaxGuyBill
Level 15
05-11-2023
06:41 PM
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Regulation §6031(a)-1(a)(3)(i) gives the rule that no return is necessary if it has no income, deductions or credits.
An extension doesn't change that rule, but I doubt if you'll find a legal authority that states that in a point-blank manner.
https://www.law.cornell.edu/cfr/text/26/1.6031(a)-1
