A partnership that fails to file a completed return on time, including extensions, is subject to a penalty for their violation of IRC Sec. 6698. The penalty will equal $195 per partner, per month or part of a month (up to 12 months) that the return is late.
Partnership Failure to File Penalty
This can become very expensive if there is a large amount of partners within the partnership. If there are 100 partners, the penalty would be $1,500 per month until the return is file completely.
The penalty can be waived by the IRS if the partnership is able to show that there is a reasonable cause for the failure to file a complete or timely return. This penalty also applies to corporations that choose Subchapter S status and fail to file a complete return on time.