partnerships included master limited partnerships can generate business income. Congress decided that profit making businesses inside a tax exempt entities such as an IRA, 401K, etc, should not escape taxation. therefore they wrote a code section that computes what is referred to as unrelated business taxable income (UBTI) and imposed a tax on this if more than $1,000 tax exempt entiities like your IRA are supposed to file annual tax returns to report and pay tax on this UBTI. This is done by the entity filing 990-T
as to whether you have a claim against Fidelity for late filing of the return or for whatever reason penalties and interest were imposed, seek legal counsel? did you get the 1065 k-1 and fail to forward it to Fidelity?
if you have any other MLP's in your retirement account, there could be future 990-Ts, that may need to be filed.
UBTI is reported in box 20 of K-1
as stated none of this gets reported on your 1040.
