IRS Releases Draft 2019 Forms 1065, 1120-S and Schedules K-1
The IRS recently issued a draft of the tax year 2019 Form 1065, U.S. Return of Partnership Income and its Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc. Changes to the form and schedule aim to improve the quality of the information reported by partnerships. The updated form and schedule also reflect changes resulting from the Tax Cuts and Jobs Act.
The additional information requested in the draft Form 1065 and Schedule K-1 is intended to aid the IRS in assessing compliance risk and identifying potential noncompliance while ensuring that compliant taxpayers are less likely to be examined. Over the past decade and a half, tax filings by partnerships have increased by 59 percent compared to the 14 percent rise in filings by C-corporations and S-corporations. The IRS states this increase in filings reinforces its need to improve the data available for its compliance selection processes.
In addition, certain similar changes can be found in the draft of the tax year 2019 Form 1120-S, U.S. Income Tax Return for an S Corporation and its Schedule K-1 , Shareholder’s Share of Income, Deductions, Credits, etc., which were also recently released.
The draft 2019 Form 1065 and Schedule K-1, as well as the draft Form 1120-S and its Schedule K-1, are near-final forms. The drafts are intended to give tax practitioners a preview of the changes and software providers the information they need to update systems before the final versions of the updated forms and schedules are released in December. The IRS is accepting comments on the drafts at IRS.gov/FormComments.