Partnership penalty abatement Rev. Proc. 84-35

I’m here to say I received the same abatement using the Rev Proc over the phone with PPS. The agent asked me how I knew both partners timely filed their personal returns. I told her, “Because, my dear, I was the one to file their returns timely, sugar britches.” You have to sweet talk them sometimes, you know.

I’m glad the Rev Proc still works; now the IRS and I are like peas and carrots again.

EADave. I'm having the same questions you did in regards to how the election out of the Centralized Partnership Audit Regime on a late return not being valid, and the application of the Rev. Proc. 84-53. I haven't been able to find any reference to this issue anywhere else.

Since you said your were successfully accepted, was the case that you did not elect out of the CPA regime, and they still accepted the 84-53 waiver? Or did you elect out on the late filed return, and they accepted at that point.

Also, is there any way to request the 84-53 waiver WITH the late filing? Assuming you have to wait for the letter, but seeing if anyone else has tried doing it with the return itself.

Wow, sorry Clay, I totally missed this sir. I recall on this particular return, I elected out of the regime which is the reason why I called the IRS, instead of sending the letter.

But, now that we can't get anyone at the IRS to answer their phones, I will pose your question to the board so we all understand. If a Partnership elects out of the Audit Regime and the 1065 is filed late, but the Partners filed their returns timely (extensions included), and all partners are individuals, will the Partnership be eligible for reasonable cause relief under Rev Proc 84-35?

This puts the Partnership at an advantage IF the 1065 has yet to be filed, and the extended due date is still valid for the individual partners. Just check or uncheck the box and move forward with filing the 1065 late, request relief and Bob is your Uncle!

Clay, it is my understanding the election out of the Audit Regime must be done in a timely manner, which is the crux of this issue. If the 1065 is filed late, the election out of the Regime is not available, thereby potentially (depending on the meaning of the Rev Proc's wording) making the 84-35 relief moot, if it is the case that you must elect out of the Regime to obtain relief provided in the Rev Proc.

Here is the Rev Proc language we are referring to: "The partnership has not elected to be subject to the consolidated audit procedures under IRC 6221 through IRC 6233." Does this mean the election out precludes the relief? It sounds like the IRS is saying, if you elect out of the regime, you do not qualify for relief under Rev Proc 84-35. Anyone here agree/disagree?