If a Partnership or S-Corporation federal income tax return is filed late (including extensions to September 15th of any given calendar year), IRS will penalize that entity in the amount of $195 per partner/shareholder per month (or portion of month) up to twelve months. Therefore, if a calendar-year partnership has four partners and their extended partnership tax return is filed with IRS on December 20th of a calendar year, it would be considered four months late. The resulting penalty would be $3,120 ($195 x 4 partners x 4 months late). If an entity has a reasonable cause, they may be able to have IRS remove the penalty. Forgetfulness or lack of funds to pay your tax preparer are not considered legitimate reasonable causes by IRS.