IRS Permits Certain Partnerships to File Superseding Tax Returns

July 29, 2019

The IRS recently announced it is granting certain partnerships the chance to file superseding 2018 tax returns. Partnerships that had timely filed their Forms 1065 and Schedules K-1 for the 2018 tax year and did not elect out of the new centralized partnership audit regime will be allowed an extension to file by Sept. 15, 2019.

The Bipartisan Budget Act of 2015 (BBA) replaced the TEFRA partnership procedures with a centralized partnership audit regime that assesses tax at the partnership level. 2018 was the first tax year for which the centralized partnership audit regime was mandatory and for which partnerships are prohibited from amending Schedules K-1 under Sec. 6031(b). Partnerships that have filed for extensions may file an original or superseding return by the extended due date of Sept. 15.

Other partnerships filed on time but may have made errors and did not request an extension, and therefore may not amend Schedules K-1 due to restrictions under Sec. 6031(b). Partners of these BBA partnerships may amend their own returns for the 2018 tax year, but if the partner is a BBA partnership Sec. 6031(b) restrictions may apply.

To be eligible for relief, the partnership must not have elected out of the BBA and must have timely filed Form 1065 and Schedules K-1. The IRS will treat the timely filing by an eligible partnership as a request for a six-month filing extension. To take advantage of this relief, eligible partnerships should file superseding returns on or before six months after the due date and include the following statement at the top of the superseding Form 1065: “SUPERSEDING FORM 1065 PURSUANT TO REVENUE PROCEDURE 2019-32.”

This relief applies to partnership tax years that ended prior to the issuance of the revenue procedure and for which the extended due date for that partnership tax year is after July 25, 2019.

For more details, visit the IRS website.