Missed the March 15 Deadline? Here's What to Do Next
Missed the March 15 filing deadline for your S-Corp or partnership with international forms? Here's what penalties you're facing and exactly how to fix it.
March 15 was the filing deadline for S-Corporations (Form 1120-S) and partnerships (Form 1065). If your entity has foreign ownership, foreign shareholders, or cross-border transactions, the stakes are significantly higher than a standard late filing.
Here is what you need to know, what penalties are on the table, and what you can do right now to minimize the damage.
Which International Forms Were Due March 15?
International information returns do not have their own standalone deadlines. They are due with the underlying return they attach to. That means:
Due March 15 (with S-Corps and partnerships)
If any of these forms were required as part of your 1120-S or 1065, they were due March 15:
- Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations)
- Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation)
- Form 8865 (Return of U.S. Persons With Respect to Certain Foreign Partnerships)
- Form 8858 (Information Return of U.S. Persons With Respect to Foreign Disregarded Entities)
- Form 8992 (U.S. Shareholder Calculation of GILTI)
Due April 15 (with C-Corps and individuals)
These same forms, when attached to a C-Corporation return (Form 1120) or an individual return (Form 1040), follow the April 15 deadline. If your international forms are due with a C-Corp or individual return, you still have time. Use it wisely.
The key rule: the international form follows its host return. No standalone deadline. Miss the return, miss the international forms with it.
The Penalties Are Steep
This is where it gets serious.
Form 5471: $10,000 per form, per year. If you have a client with interests in multiple foreign corporations, that adds up fast. The penalty applies for each month the return is late, up to a maximum of $60,000 per return.
Form 5472: $25,000 per form, per year. This is one of the highest penalties in the international information return space. Foreign-owned U.S. LLCs and corporations that fail to file face $25,000 for the initial failure, plus an additional $25,000 for each 30-day period of continued noncompliance after IRS notification. There is no cap.
Form 8865: $10,000 per form, per year, with the same escalation structure as Form 5471.
Form 8858: While the penalty mirrors Form 5471 at $10,000, it is often overlooked because practitioners may not realize a foreign disregarded entity requires its own information return.
Standard late filing penalties: On top of the international penalties, the underlying 1120-S or 1065 carries its own late filing penalty of $235 per shareholder or partner, per month, for up to 12 months.
These penalties are assessed automatically. The IRS does not send a warning first.
"We Filed an Extension. We're Fine, Right?"
Not necessarily.
Filing Form 7004 extends the time to file the return, and because the international forms travel with the return, a valid extension covers them as well. But Form 7004 does not extend the time to pay any tax owed.
Here is the common mistake: assuming the extension was properly filed when it was not. A 7004 that is incomplete, sent to the wrong address, or filed after the deadline provides no protection. And for entities that owe tax, failing to pay at least the estimated amount due with the extension can invalidate the extension for penalty purposes.
If you are not 100% certain the extension was properly filed, verify it now. A few minutes confirming acceptance could save tens of thousands in penalties.
What to Do Right Now
If you missed the March 15 deadline for your S-Corp or partnership return and no extension was filed, here is your action plan:
1. File Immediately
The single most important thing you can do is file as soon as possible. Penalties accrue monthly. Every day you wait increases the exposure. Get the return and all attached international forms filed now.
2. Request Reasonable Cause Penalty Abatement
The IRS can abate international information return penalties if you can demonstrate reasonable cause for the late filing. This is not automatic, and "I forgot" or "my accountant didn't tell me" generally does not qualify.
Strong reasonable cause arguments include:
- Reliance on a tax professional who failed to advise on the filing requirement
- Inability to obtain necessary information from foreign entities despite diligent efforts
- Serious illness or unavoidable absence
- First-time penalty abatement (for the underlying return, though not always available for international penalties)
The reasonable cause statement should be attached to the late-filed return. It needs to be specific, factual, and supported by documentation. A generic one-paragraph letter will not cut it.
3. Consider the Streamlined Filing Procedures
For individual taxpayers (not entities) who have failed to report foreign financial accounts or file international information returns, the IRS Streamlined Filing Compliance Procedures may be an option. This program is designed for taxpayers whose failure to file was non-willful.
The streamlined procedures allow you to file up to three years of amended or delinquent income tax returns and up to six years of delinquent FBARs with a reduced penalty structure. For taxpayers who qualify as foreign residents, the penalty may be zero.
This is not available for every situation, and making a streamlined submission when you do not qualify can create more problems than it solves. Get professional guidance before going this route.
4. Do Not Ignore IRS Notices
If you receive a CP15 or CP215 notice assessing international information return penalties, do not put it in a drawer. You have a limited window to respond. The penalty amount on these notices is often incorrect or based on incomplete information, and a well-prepared response can significantly reduce or eliminate the assessment.
For CPAs: What About Your April 15 Clients?
If you have C-Corp or individual clients with international filing requirements, you still have time before April 15. But "time" has a way of disappearing during busy season.
Now is the moment to audit your client list:
- Which individual clients have foreign financial accounts, foreign corporations, or foreign partnerships?
- Which C-Corp clients have foreign ownership or foreign subsidiaries?
- Are the international forms prepared, or are they sitting in a "we'll get to it" pile?
If the international piece is outside your firm's core competency, bringing in a specialist before the deadline is far cheaper than dealing with penalties after it.
When to Bring in a Specialist
International information returns carry complexity that goes beyond the standard compliance workflow. The penalty exposure is disproportionately high relative to the complexity of the forms, and the reasonable cause standards are different from domestic penalty abatement.
A specialist can:
- Prepare and file the delinquent international forms correctly
- Draft the reasonable cause statement with the specificity the IRS expects
- Evaluate whether the streamlined procedures or delinquent international information return procedures are appropriate
- Handle penalty abatement correspondence if notices have already been issued
You keep the client relationship. I handle the international piece. That is how the best firms operate during busy season.
The Bottom Line
Missing the March 15 deadline with international forms attached is not a minor issue. But it is fixable. The key is acting quickly, filing correctly, and building the strongest possible case for penalty relief from the start.
And if your international forms are due with a C-Corp or individual return on April 15, do not wait until April 14 to figure out whether they are ready. The time to act is now.
If you or your clients are in this situation, I can help. I specialize in exactly this type of work: international tax compliance, penalty abatement, and getting taxpayers back into compliance with the IRS.
Book a consultation or email me directly at tajma@qorritax.com.
Tajma Qorri is the founder of Qorri Tax Service LLC, specializing in federal and international tax services for foreign-owned U.S. entities, U.S. persons with foreign assets, and CPA firms needing international tax support.