CP 259

[ljwalters]

The CP 259 is for no having filed a partnership return.

Client is a sch c business (300K) range on net income. I had been doing his return as a joint venture checking the joint box at the top of the worksheet. 2 sch se's. This is a community property state, CA. Last year we couldn't do that any more so I made it taxpayers only. Also this year taxpayer went on state disability, in order to do that the spouse told CA disability department that it was both of their's business and that she was running the business while he was unable to work.

Now they get this form. Since they never registered as a partnership can the IRS just arbitrarily make them a partnership.

and how would you answer this letter.

Linda and buddy

[kcjenkins]

Well, since it's now just hers, it should be shown as her Sch C now. For last year, tho, since she already declared it was a joint business, and it's clearly been that all along, I think the IRS was right, and you should have done a 1065. Your alternative was to do two Sch C's.

[ljwalters]

Last year I did it in his name only not as joint. Don't you have to register as a partner, and do they have to do that now. or just file the 1065 and ament the return to take the sch c off and add the k1.

Linda and buddy

[Lion EA]

Is it a partnership or is it a qualified joint venture of a husband and wife or is it a sole proprietorship? What did they tell the disability people?

[ljwalters]

Is it a partnership or is it a qualified joint venture of a husband and wife or is it a sole proprietorship? What did they tell the disability people?

They told the disabilty people it was a joint venture of husband and wife, a family business and that she could handle things and has while he had surgry.

Linda and buddy

[Lion EA]

So, write up a response for them to sign and mail to the contact on the CP259 stating what you told us and detailing (names and SSNs) where the activity was reported for the year in question.