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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15589
Experience:  15years with H & R Block. Divisional leader, Instructor
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I need an answer from a business tax attorney. I am in a

Customer Question

I need an answer from a business tax attorney.
I am in a general partnership practicing dentistry with***** I am incorporated. The partnership is between and individual and my corp. the partnership started 2002. We have been in a partnership dispute since 2011. The partnership has not been dissolved, but my partner refuses to file partnership taxes since 2011. I had an accountant prepare partnership taxes for 2012-2014, but have not yet filed. I believe my Business partner has filed as a sole practitioner with a schedule C for 2012-2014. How can I verify? What should I do? Should I just file the partnership taxes I had prepared? Confused.
Submitted: 2 years ago.
Category: Tax
Expert:  Robin D. replied 2 years ago.
Hello and thanks for trusting me to help you today. I am a tax adviser with over 20 years of experience.
If you have not received your K1 from the partnership then your personal returns are late too.
If you have prepared the 1065 you should file the 1065. You should also issue the needed K1s for the partners.
As long as your position allows you to sign the 1065 then filing is correct. Form 1065 is not considered to be a return unless it is signed by a general partner or LLC member manager. As long as you are a general partner you can sign the 1065.
For each failure to furnish Schedule K-1 to a partner when due and each failure to include on Schedule K-1 all the information required
to be shown (or the inclusion of incorrect information), a $100 penalty may be imposed for each Schedule K-1 for which a failure occurs.
By not filing you have opened yourself up to a penalty. A penalty is assessed against the partnership if it is required to file a
partnership return and it
(a) fails to file the return by the due date, including extensions
(b) files a return that fails to show all the information required, unless such failure is due to reasonable cause.
The penalty is $195 for each month or part of a month (for a
maximum of 12 months) the failure continues, multiplied by the total number of persons who were partners in the partnership during any part of the partnership's tax year for which the return is due.
Customer: replied 2 years ago.
I'm sorry but, I don't think you understood my question. I know the taxes are past due. I know there will be penalties. I am a general partner in a partnership and have the right to sign the tax return. I would like to file. I will furnish the K-1's to my partner, however my specific question is:
Was it lawful of my partner to file as a sole proprietor with a schedule C, instead of a 1065 partnership return? What are my recourses if he did?
Expert:  Robin D. replied 2 years ago.
No, it is not correct for your partner to file a Schedule C for the partnership.
If he did then you should advise the IRS of the deception on his part. That is not only your recourse but your obligation.
You as the general partner are responsible too for the filing of the partnership information. If anything other than a 1065 was filed for the partnership and you know that to be true, you should report that to the IRS.
You would have to find out from your partner if he filed the partnership income as a Schedule C because the IRS is not going to tell you that information as your name would not be on the Schedule C.