Dealing With The IRS

Dealing with the IRS is part of a Lionsgate Tax Department member’s daily job as our clients either have audits or notices regarding their tax returns that need to be addressed. Our first priority is always to remove the anxiety and worry from our client’s mind. The most common notices we encounter deal with business entity late filing and failure to file penalties.

The IRS assesses a failure-to-file penalty of 4.5% of the unpaid taxes for each month, not to exceed 25% of the total unpaid taxes. If a partnership, which is a non-tax paying entity, fails to timely file its Form 1065, the penalty charge is $205 per month up to a maximum of 12 months. In addition, the penalty amount is multiplied by the total number of partners in the partnership during any part of the tax year. Depending on the size of the partnership, these penalties can exceed $10,000.