Updated November 5, 2026. Quick answer: For a partnership return required to be filed in 2028 (tax year 2027), the dollar amount in the section 6698 late-filing penalty is $265 per partner for each month or part of a month, up from $260 for returns filed in 2027, per IRS Rev. Proc. 2026-35, announced November 5, 2026. The penalty runs for up to 12 months.
The 2028 amount
Rev. Proc. 2026-35 states: “In the case of any return required to be filed in 2028, the dollar amount used to determine the amount of the penalty under § 6698(b)(1) is $265.”
| Return required to be filed | Penalty per partner per month | Source |
|---|---|---|
| Filed in 2026 | $255 | Instructions for Form 1065 |
| Filed in 2027 | $260 | Rev. Proc. 2025-32, item .55 of section 3 |
| Filed in 2028 | $265 | Rev. Proc. 2026-35, item .60 of section 3 |
What section 6698 says
The statute makes a partnership liable if it fails to file on time or files an incomplete return: “such partnership shall be liable for a penalty determined under subsection (b) for each month” “(or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause.” The monthly amount is a product: “the amount determined under this subsection for any month is the product of” the dollar amount and “the number of persons who were partners in the partnership during any part of the taxable year.”
The Form 1065 instructions describe the same rule: “The penalty is $255 for each month or part of a month (for a maximum of 12 months) the failure continues, multiplied by the total number of persons who were partners in the partnership during any part of the partnership’s tax year for which the return is due.”
What it costs, and how the figure is set
An invented partnership with 4 partners that is three months late owes $265 times 4 partners times 3 months, or $3,180 (computed). At the 12 month maximum the same partnership owes $265 times 4 times 12, or $12,720 (computed). The penalty counts every person who was a partner during any part of the year, not only those at year end.
The statute’s base figure is $195, indexed from a 2013 base, with this rounding: “If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.” Check: $265 and $260 are multiples of $5 (computed). The cost-of-living factor is not printed in the Rev. Proc., so this checks the rounding and not the factor.
Where it connects to the return
The return is Form 1065, the due date and extension are on the Form 1065 and 1120-S due date for 2027, and the extension form is Form 7004. The tax lines are on Form 1065 lines 24 to 31, tax, payments and amount owed. A first-time relief request is covered on first time penalty abatement.
Common mistakes
- Treating $265 as a flat penalty. It is multiplied by the number of partners and by the months the failure continues, up to 12.
- Counting only current partners. The statute counts every person who was a partner during any part of the taxable year.
- Using $260 for a 2027 tax year return. The Rev. Proc. sets $265 for returns required to be filed in 2028.
Related: Form 1065, the Form 1065 and 1120-S due date for 2027, Form 7004, and first time penalty abatement.
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Answer againSources
- Internal Revenue Service, Rev. Proc. 2026-35, tax year 2027 inflation-adjusted amounts (announced November 5, 2026): www.irs.gov
- Internal Revenue Service, Rev. Proc. 2025-32, tax year 2026 inflation-adjusted amounts, as modified by the One, Big, Beautiful Bill Act: www.irs.gov
- 26 U.S.C. 6698, Failure to file partnership return (U.S. Code, U.S. Government Publishing Office): www.govinfo.gov
- Internal Revenue Service, 2025 Instructions for Form 1065: www.irs.gov
Read from the primary documents linked above on November 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.