The debt-hit Scottish Socialist Party faces a hefty fine or possible police action for failing to submit its accounts to a financial watchdog.
The SSP has missed two deadlines to submit its accounts
Independent scrutinisers the Electoral Commission confirmed that the SSP had failed to meet the mandatory requirement set by the UK Parliament.
It can either fine the SSP up to £5,000 or call in the police to investigate.
The party said it had asked the commission for more time and it was confident of meeting a new deadline.
Under the Political Parties Elections and Referendums Act, all registered parties must submit accounts to the commission for scrutiny.
Parties spending less than £250,000 were required to have account details in by 31 March, while parties spending more than £250,000 had to have them in by 7 July.
The SSP, which was due to submit its accounts by July, had asked for an extension to 4 August which the commission said was "granted in good faith".
However, the party has since missed that deadline.
A spokeswoman for the commission revealed that the SSP had again submitted a request asking for an extension.
But she told BBC Scotland's news website that this further request had been turned down.
Ex-leader and current SSP MSP, Tommy Sheridan, said the delay was not a "debt problem or a political problem, but an administrative problem".
He explained: "We have limited staff who work very hard.
"Recently they have had the general election and the G8, which they were embroiled in."
Mr Sheridan said that the commission had previously been very understanding of the party's situation, given its size and age.
He added that he was confident the accounts would be in this month.
The commission's spokeswoman said it was vital that the party discussed with the watchdog why it had missed a second deadline.
A total of four out of the six SSP MSPs were banned from parliament
She explained: "The original extension was granted in good faith and we expected the party to have submitted its accounts to us by now.
"A request was received for a further extension but we felt that a sizeable party like the SSP should be able to provide us with this information."
The spokeswoman said that the failure by the SSP to submit its accounts left the commission with two options;
- either to impose a fine ranging from £500 to £5,000
- or to pass the matter onto the police, which could result in charges being brought against party treasurer Allison Kane
The commission spokeswoman added: "Obviously we would not want to contact the police at this stage, but we will wait to receive the accounts before deciding what action to take."
A fine would be a further financial blow to the party which was expected to be £200,000 in the red by the end of the last financial year.
Tommy Sheridan and Rosemary Byrne, a fellow SSP MSP, have previously had to take out personal loans to help the party.
MISSED DEADLINE - EXAMPLE PARTIES
Single Issues Party
Social Justice Party
Warwick Residents' Association
Six Towns Independent Group
Four of the six Socialist MSPs are currently banned from the Scottish Parliament for a month after staging an in-house protest.
They claimed Holyrood had failed to recognise the right of people to protest at the G8 summit.
It has been estimated that the ban, which also includes the suspension of salaries and allowances, could cost the party about £25,000.
The commission revealed that 70 political parties throughout the UK had failed to meet the accounts deadline.
However, most of those listed are small organisations without political representation in parliaments or councils.
They include Hull Independents, the Northern Progress Party, People's Independent Party 2002 and the Unrepresented Peoples Party.