IRS Penalty Relief 2026 | Guide for Forms 1065 & 1120-S
The March 16th deadline has passed. Request penalty relief now to protect your business.
Action Required

Missed the Deadline? How to Request IRS Penalty Relief for Forms 1065 & 1120-S

The March 16th deadline for Partnerships and S-corporations has passed. If you failed to file or extend, you are currently accruing penalties. However, you may qualify for IRS Penalty Relief under Section 7502 and administrative waivers.

MISSED

March 16, 2026. The official deadline has expired. Damage control is now the priority.

FTA

First-Time Abatement. Administrative relief for taxpayers with a clean 3-year history.

RELIEF

Penalty Relief. You can request a waiver based on "Reasonable Cause."

Request IRS Penalty Relief

The Deadline has Passed. What Now?

If you are reading this after March 16, 2026, the filing deadline for Form 1065 and Form 1120-S has officially passed. Penalties for late filing are assessed per partner or shareholder, per month, and can accumulate quickly.

Crisis Action Plan

What Business Owners Should Do Right Now

  • File Immediately: Filing today stops the penalty clock for next month. Do not wait for an IRS notice.
  • Gather Evidence: If you mailed your return on or before March 16, locate your USPS Certified Mail receipt to invoke Section 7502.
  • Check Eligibility: Review if you qualify for First-Time Abatement (FTA) or have a "Reasonable Cause" for the delay.
  • Request Relief: Use the official channels to request a penalty waiver once the return is processed.
Legal Authority: Section 7502

Did you mail it on time?

Under Internal Revenue Code Section 7502, a document is treated as filed on time if it was postmarked by the due date. If you have a USPS receipt dated March 16, you are protected.

1

Postmark Date
must be March 16, 2026 or earlier.

2

Proof of Mailing
Certified or Registered mail is best.

3

Timely Filing
The IRS must treat it as filed on time.

Understanding Late Filing Penalties

For informational returns, the IRS may assess a penalty of $255 per partner or shareholder, per month for late filing.

Monthly Exposure Example
3 owners × $255 = $765/month

This penalty resets every month the return remains unfiled. Multi-owner businesses are especially vulnerable.

Prevent 2027 Penalties

Automate with Relay Banking

Relay lets you open up to 20 free checking accounts to separate taxes and profit automatically. Never miss a deadline again.

Switch to Relay
IRS mailing rule infographic explaining timely mailing treated as timely filing for Forms 1065 and 1120-S

The Bottom Line

If your return is not filed, do it today. Once filed, if you receive a penalty notice, request Administrative Penalty Relief immediately.

Need Help Resolving Penalties?

Don't let avoidable fines drain your business capital. Let's build a recovery strategy and a system for long-term compliance.