4/15 is Better Than 9/15
Most everyone assumes that the April 15 deadline for tax preparers is the worst date. However, an even more stressful date (at least for me) is the September 15 deadline. This is when all of the partnership and S corporation tax returns are due with no further extension.
If we are late with filing these returns, there is a $205 per month per owner penalty which can add up fast. The deadline is this Wednesday and likely there will be a few late returns that I will need to deal with.
On another note. We saw some new proposals out of Congress (at least talking points) that appear to minimize the possible damage from any transfer tax. As we have discussed multiple times in the past, President Biden and the Democrats were proposing a transfer tax (commonly called “eliminating the step-up) at death. There would be a small exemption amount.
The new proposal appears to allow a $5 million per person exemption plus a $25 million extra exemption for family farms. This means a farm couple could have gross gains of up to $35 million being exempted. Although we would prefer to have no change to current law, this is at least a step in the right direction.
The chatter appears to indicate that the transfer tax is facing a very rough road for any type of passage. Multiple Democrats are opposed and it only takes one Senator or 4 House members to change and nothing will happen. We will keep you posted.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
Iv”e been reading that the IRS destroyed millions of unopened returns in 2020 (apparently 2019 returns). I filed all my 2019 partnership returns by 3/16/2020 and have gotten 2 failure to file notices with the maximum per partner penalty. Do you have any source to substantiate that the they destroyed returns that i could use with the IRS? Thanks for the help.
Jim Griebel, Valley Springs, SD