Instructions For Forms 8804, 8805, And 8813 (2015) (Page 4 of 8) in pdf

Late Filing of Correct Form

generally make the installment

partnership. The partners use this

payments for each foreign partner on or

information to adjust the amount of

8805

before the 15th day of the 4th, 6th, 9th,

estimated tax that they must otherwise

A penalty may be imposed for failure to

and 12th months of the partnership's tax

pay to the IRS. The notification to the

file each Form 8805 when due

year.

foreign partners must be provided within

(including extensions). The penalty may

10 days of the installment due date, or,

Generally, pay any additional

also be imposed for failure to include all

if paid later, the date the installment

amounts due when filing Form 8804.

required information on Form 8805 or

payment is made. See Regulations

However, if the partnership files Form

for furnishing incorrect information. The

section 1.1446-3(d)(1)(i) for information

7004 to request an extension of time to

penalty is based on when a correct

that must be included in the notification

file Form 8804, pay the balance of

Form 8805 is filed.

and for exceptions to the notification

section 1446 withholding tax estimated

requirement.

For a Form 8805 required to be filed

to be due with Form 7004 in order to

before January 1, 2016, see the penalty

avoid the late payment penalty.

If a partnership has gross effectively

amounts in the 2014 Instructions for

connected income, it must file a

Coordination With Other

Forms 8804, 8805, and 8813. For a

separate Form 8805 for each partner for

Withholding Rules

Form 8805 required to be filed after

whom it paid section 1446 tax. In

December 31, 2015, the penalty is $260

Interest, Dividends, etc.

addition, if the partnership reduces ECTI

per Form 8805, with a maximum penalty

for state and local income tax

Fixed or determinable annual or

of $3,178,500 per year.

deductions permitted under Regulations

periodical (FDAP) income subject to tax

section 1.1446-6(c)(1)(iii) or relies on a

There are some situations where the

under section 871(a) or 881 is not

Form 8804-C it receives from a partner

penalty under section 6721 is reduced

included in the partnership's ECTI under

to reduce its section 1446 tax, it must

or eliminated. This may apply if the

section 1446. However, these amounts

complete a Form 8805 for the partner

partnership has average annual gross

are independently subject to withholding

even if no tax is paid on behalf of the

receipts of not more than $5 million

under the requirements of sections

partner. The foreign partner must also

during a specified period of time;

1441 and 1442 and their regulations.

receive a copy of its Form 8805 by the

corrects the failure to file within a

due date of the partnership return

specified period; or has a de minimis

Real Property Gains

(including extensions).

number of failures to file correct Forms

8805.

Domestic partnerships. Domestic

A foreign partner that is a foreign

partnerships subject to the withholding

There can also be a higher penalty

trust or estate must provide to each of

requirements of section 1446 are not

imposed when the failure is due to

its beneficiaries a Form 8805 completed

subject to the payment and reporting

intentional disregard of the requirement

as described under

requirements of section 1445(e)(1) and

to file timely correct information returns.

Schedule T—Beneficiary Information,

its regulations for income from the

later.

A partnership can seek a waiver of

disposition of a U.S. real property

the penalty if the partnership can

interest. A domestic partnership's

Interest and Penalties

establish it had reasonable cause for

compliance with the requirement to pay

the failure.

a withholding tax under section 1446

Interest

satisfies the requirements under section

Failure To Furnish Correct

Interest is charged on taxes not paid by

1445 for dispositions of U.S. real

the due date, even if an extension of

Form 8805 to Recipient

property interests. However, a domestic

time to file is granted. Interest is also

A penalty may be imposed for each

partnership that would otherwise be

charged on penalties imposed for failure

failure to furnish Form 8805 to the

exempt from section 1445 withholding

to file, negligence, fraud, and

recipient when due. The penalty may

by operation of a nonrecognition

substantial understatements of tax from

also be imposed for each failure to give

provision must continue to comply with

the due date (including extensions) to

the recipient all required information on

the requirements of Regulations section

the date of payment. The interest

each Form 8805 or for furnishing

1.1445-5(b)(2).

charge is figured at a rate determined

incorrect information.

Foreign partnerships. A foreign

under section 6621.

partnership subject to withholding under

For a Form 8805 required to be

Late Filing of Form 8804

section 1445(a) during a tax year will be

furnished before January 1, 2016, see

A partnership that fails to file Form 8804

allowed to credit the amount withheld

the penalty amounts in the 2014

when due (including extensions of time

under section 1445(a), to the extent

Instructions for Forms 8804, 8805, and

to file) generally may be subject to a

such amount is allocable to foreign

8813. For a Form 8805 required to be

penalty of 5% of the unpaid tax for each

partners, against its liability to pay the

furnished after December 31, 2015, the

month or part of a month the return is

section 1446 withholding tax for that

penalty is $260 per Form 8805 with a

late, up to a maximum of 25% of the

year. This credit is allowed on line 6d or

maximum penalty of $3,178,500 per

unpaid tax. The penalty will not apply if

6e of the Form 8804 filed by the foreign

year.

the partnership can show reasonable

partnership.

There are some situations where the

cause for filing late.

penalty under section 6722 is reduced

Reporting to Partners

If you receive a notice about penalty

or eliminated. This may apply if the

When making an installment payment of

and interest after you file Form 8804,

partnership has average annual gross

the section 1446 withholding tax, a

send us an explanation and we will

receipts of not more than $5 million

partnership must notify all foreign

determine if you meet reasonable-cause

during a specified period of time;

partners of their allocable shares of any

criteria. Do not attach an explanation

corrects the failure to furnish within a

section 1446 withholding tax paid by the

when you file Form 8804.

specified period; or has a de minimis

Instructions for Forms 8804, 8805, and 8813 (2015)

Instructions For Forms 8804, 8805, And 8813 (2015) Page 4

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