USTaxPenaltySaverLate Filing Penalty Calculator for Form 1065 & 1120-S
Partnership and S-corp penalties add up fast: $245 per owner per month in 2025. A 5-partner LLC just 4 months late owes $4,900.
Check if you qualify for the Small Partnership Exception or First-Time Abatement — could reduce your penalty to $0.
How the Penalty Is Calculated
IRC § 6698 (partnerships) and § 6699 (S-corps)
Penalty Formula
$245 × Partners × Months Late
(Maximum 12 months)
Penalty Rates by Tax Year
| Tax Year | Rate Per Owner/Month | Max (12 mo, 5 owners) |
|---|---|---|
| 2026 | $260 | $15,600 |
| 2025 | $245 | $14,700 |
| 2024 | $235 | $14,100 |
| 2023 | $220 | $13,200 |
Example: 5-Partner LLC, 4 Months Late (2025)
Rate
$245
× Partners
5
× Months
4
= Penalty
$4,900
Three Ways to Eliminate Your Penalty
Our calculator checks your eligibility for all three
Small Partnership Exception
Partnerships Only • Rev. Proc. 84-35
Penalty waived entirely if you meet all requirements:
- ✓10 or fewer partners
- ✓All U.S. individuals, estates, or C-corps
- ✓No special allocations (pro-rata only)
- ✓All partners timely filed individual returns
First-Time Abatement
Partnerships & S-Corps • IRM 20.1.1.3.3.2.1
Penalty waived if clean compliance history:
- ✓No penalties on same form type in prior 3 years
- ✓All required returns filed
- ✓All taxes paid (or on payment plan)
Reasonable Cause
All Entities • IRM 20.1.1.3.2
Penalty waived if you had a valid reason:
- •Death or serious illness
- •Fire, natural disaster, casualty
- •Unable to obtain records
- •Erroneous IRS advice
What You Get for $49
Everything you need to understand and fight your penalty
Penalty Calculation
- Month-by-month penalty breakdown
- Correct rate for your tax year
- 12-month cap properly applied
Relief Eligibility
- Small Partnership Exception check
- First-Time Abatement eligibility
- Reasonable cause categories
Ready-to-Send Letters
- Rev. Proc. 84-35 SPE letter
- FTA request letter
- Reasonable cause letter template
Documentation
- Downloadable PDF report
- IRS contact information
- 14-day satisfaction guarantee
Pay $49 once → Potentially save $4,900+ in penalties
Calculate My PenaltyPartnership & S-Corp Penalty FAQ
Common questions about Form 1065 and 1120-S late filing penalties
The penalty is $245 per partner/shareholder per month (or part of month) the return is late, up to 12 months maximum. For a 5-partner LLC that files 4 months late in 2025: $245 × 5 × 4 = $4,900.
Small partnerships with 10 or fewer qualifying partners may avoid penalties entirely if: all partners are U.S. individuals, estates, or C corporations; there are no nonresident aliens; all items are allocated pro-rata (no special allocations); and all partners timely filed their individual returns reporting their share of partnership items.
Yes. If your partnership or S-corp has a clean 3-year compliance history (no penalties on Form 1065 or 1120-S), you may qualify for First-Time Abatement under IRM 20.1.1.3.3.2.1.
Form 1065 (partnerships) penalties are under IRC § 6698. Form 1120-S (S-corporations) penalties are under IRC § 6699. The calculation is identical: same rate per owner per month. The Small Partnership Exception only applies to partnerships.
For calendar year filers, the return is due March 15 of the following year. With a valid Form 7004 extension, the deadline extends to September 15. For fiscal year filers, it's the 15th day of the 3rd month after the tax year ends.
Possibly. Reliance on a tax professional can be reasonable cause, but you must show you provided all necessary information on time and reasonably relied on the professional. The IRS considers this on a case-by-case basis.
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