Your business has an IRS problem. The rules for fixing it are different.
Pass-through entities get their own penalties, their own audit regime, and their own traps. These guides from tax attorney Darrin T. Mish explain how the IRS treats your entity and what you can do about it.
What landed on your desk?
- Late Form 1065Penalty assessed per partner, per month
- Late Form 1120-SPenalty assessed per shareholder, per month
- BBA audit noticeThe partnership itself may owe the tax
- Salary too lowDistributions recharacterized as wages
- K-1 does not matchPartner and entity reporting out of sync
- Election problemsLate or terminated S elections
Guide library
Four areas where entities get into trouble
Entity Filing & Penalties
8 guidesLate Form 1065 and 1120-S penalties, K-1 furnishing penalties, deadlines, and getting penalty relief.
- First Time Abate for Late Partnership and S Corporation Returns
- Partnership and S Corporation Filing Deadlines and Extensions: What the Code Actually Requires
- Penalties for Failing to Furnish Schedule K-1s: How IRC 6722 Applies to Partnerships and S Corporations
- Reasonable Cause for Late Partnership and S Corporation Returns
BBA Partnership Audits
10 guidesThe centralized partnership audit regime: the partnership representative, imputed underpayments, push-outs, and AARs.
- BBA Partnership Audit Notices: The NAP, NOPPA, FPA and the Deadlines Behind Them
- Consistent Reporting Under IRC 6222: When Your Return Must Match the Partnership Return
- Electing Out of the BBA Partnership Audit Regime Under IRC 6221(b)
- Reducing a BBA Imputed Underpayment: How Modification Under IRC 6225(c) Works
S Corporation Problems
7 guidesReasonable compensation, basis and distributions, shareholder loans, and elections that went sideways.
- Form 7203 and S Corp Basis Limitations: What the IRS Now Sees on Your Return
- Inadvertent S Corp Termination: How To Save an Election You Lost by Accident
- Late S Corp Election Relief: Fixing a Missed or Lost Form 2553
- S Corp Distributions in Excess of Basis: When Your Own Money Becomes Taxable Gain
K-1s, Basis & LLC Issues
5 guidesK-1 mismatches, late and amended K-1s, partner loss limits, LLC classification, and owner liability.
- Got an Amended or Late K-1? What Owners and Entities Need to Do Next
- K-1 Mismatch Notices: Why the IRS Says Your Return Does Not Match Your Schedule K-1
- LLC Classification Problems and Form 8832: When Your LLC Is Not What You Think
- Partner Loss Limitations: Basis, At-Risk, and Passive Activity Rules
How to approach it
Entity problems reward precision
A partnership penalty is not an individual penalty. A BBA audit is not a regular audit. Start with the right question.
- 01
Identify the entity problem
Is it a filing penalty, an audit adjustment, a basis issue, or a collection problem? Each one runs on different rules and different clocks.
- 02
Find the deadline
BBA audits, penalty notices and elections all carry response windows. Missing one can close a door that never reopens.
- 03
Match the remedy to the rule
First-time abatement, reasonable cause, modification requests, late election relief. The Code and the IRM tell you which tool fits.
Start here
Most-read guides
The BBA Partnership Audit Regime Explained: How the IRS Audits Partnerships Now
Under the BBA rules, the IRS audits the partnership, assesses the tax against the partnership, and binds every partner to the result. Here is how the system works.
Entity Filing & PenaltiesThe Form 1065 Late Filing Penalty: How IRC 6698 Works and How to Fight It
A partnership that owes no tax can still get hit with a five-figure penalty for filing Form 1065 late. Here is how IRC 6698 is calculated and how relief works.
S Corporation ProblemsS Corp Reasonable Compensation: How the IRS Turns Your Distributions Into Wages
If you work in your S corporation and take little or no salary, the IRS can reclassify your distributions as wages and assess employment taxes on them.
K-1s, Basis & LLC IssuesWho Is on the Hook When an LLC, Partnership, or S Corp Owes the IRS
Your LLC or S corporation owes the IRS. Whether that debt can follow you home depends on the type of tax, how the entity is classified, and state law.
BBA Partnership AuditsThe Imputed Underpayment Explained: How the IRS Taxes a Partnership Under BBA
Under BBA, the IRS can bill the partnership itself for an audit adjustment, at the top tax rate, in the year the audit ends. Here is how the imputed underpayment works.
S Corporation ProblemsForm 7203 and S Corp Basis Limitations: What the IRS Now Sees on Your Return
Form 7203 shows the IRS your S corporation stock basis, debt basis, and allowable losses every year. If your numbers do not hold up, the losses and distributions you claimed may not either.
Talk to a tax attorney about your entity
The Law Offices of Darrin T. Mish, P.A. handles federal tax matters before the IRS nationwide from Tampa, Florida. Learn more at GetIRSHelp.com or call.
Call 813-229-7100