Failure to File Partnership Return

ID:
Office:
UILC:
CCA_2009020210173153
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6698.00-00
Number: 200911019
Release Date: 3/13/2009
From: ---
Sent: Monday, February 02, 2009 10:17:33 AM
To: ---
Cc: ---
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Subject: RE: IRC §6698 Penalty
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Your understanding is correct. P.L. 110-141 is an off-code provision that adds $1 to the § 6698(b)(1) Failure to File a Partnership Return penalty. The $1 addition does not apply to S Corporation returns.
The $1 increase also only applies to a taxable year beginning in 2008.
The § 6698 penalty will not state $90. The $90 figure is only reached by taking the $89 penalty and adding the $1 from the off-code provision. The Code has not changed because P.L. 110-141 did not amend the code. Instead, P.L. 110-141 added a separate off-code requirement that operates simultaneously with the code.
While I have not seen anything in the legislative history to explain why the code was not amended in this specific case, small penalty increases can be by-products of the pay-as-you-go system. The penalty increase may have been added to off-set a spending increase or tax cut in another provision. However, again, I do not know what the reasoning was in this case.
I hope this answers your questions. If there is anything else I can do to help you or if you have any other questions please feel free to contact me.
Have a good day,
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