Late Partnership Return

A new partnership is late filing its first return for 2017. There are 2 partners and only a small amount of start up costs that the partners prefer to capitalize rather than deduct, thus no income or deductions on the K-1s.

Will a late penalty be imposed in this case? The partners would prefer to forego the start up costs and not file a 2017 1065 if filing means they will be penalized and then have to request abatement.

Instructons:

Who Must File Domestic Partnerships
Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.
Entities formed as LLCs that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic partnerships.

Thanks for the response--much appreciated. Will they be penalized for filing even if a return is not required?

Good question. Not a foregone conclusion. But why file? Forgo that opportunity and risk.

They would like to get the future benefit of the start up costs but only if there are no penalties to deal with

If they haven't actually started business, there would be no difference in filing the Initial return for 2018.

If you get correspondence on the issue (maybe from the SS-4 filing), send back a letter stating they had no income or expenses and, thus, no filing requirement. Done it several times...no issue.

CaptCook is correct. They cannot deduct any start-up expenses until they, well, start up the business. And that year is the year when they elect to deduct/amortize.