What is the penalty for not filing Form 1065 electronically with more than 100 partners?

The accurate understanding of the penalty for failing to file Form 1065 electronically when there are more than 100 partners is that there is a fine imposed for each partner involved. The IRS mandates that partnerships with more than 100 partners must submit their Form 1065 electronically, and if they do not comply, they face a financial penalty based on the number of partners. This requirement is part of the IRS's efforts to streamline processing and improve accuracy in tax filings, making it vital for partnerships with a significant number of partners to adhere to the electronic filing requirement.

The other options don't correctly represent the consequences of non-compliance. An automatic rejection of the filing is not a standard penalty; instead, the failure to comply generally results in a financial penalty rather than rejection. While it might seem logical that a filing could be amended, the primary penalty associated with the electronic filing requirement for partnerships hinges on the fines per partner, rather than necessitating an amendment. Lastly, claiming no penalty overlooks the established fines that are specifically designed to encourage compliance with the electronic filing mandate.