IRS extends time to file Forms 1065

Tax Hot Topics newsletter The IRS issued Rev. Proc. 2019-32 on July 25 providing for a six-month extension of time for certain partnerships to file a superseding Form 1065, “U.S. Return of Partnership Income,” and furnish corresponding Schedules K-1, to each of its partners.

The guidance states that some partnerships that already filed Form 1065 for the 2018 taxable year may have made errors, including not properly reporting all of the required information on the Schedules K-1. A partnership may file a superseding Form 1065 and furnish corresponding Schedules K-1 to its partners prior to the filing deadline, including extensions. As a result, partnerships that timely requested a filing extension may file a superseding Form 1065 and furnish corresponding Schedules K-1 until the extended due date for the 2018 taxable year. However, partnerships that did not timely request an extension of the filing deadline, generally would not now be able to file a superseding return or amend Schedules K-1 for the 2018 taxable year, absent the relief.

The relief provided under Rev. Proc. 2019-32 is especially relevant for partnerships that had to take into account significant provisions of the so-called Tax Cuts and Jobs Act, such as reporting under Section 199A and Section 951A, related to the global intangible low-tax income (or GILTI) tax.

The relief is limited to partnerships subject to the centralized partnership audit procedures of the Bipartisan Budget Act of 2015 (BBA), and partnership taxable years that ended prior to July 25, 2019, and for which the extended due date is after July 25, 2019. For example, calendar year partnerships that did not request a filing extension and timely filed Form 1065 and furnished Schedules K-1 on or before March 15, 2019, may rely on the relief to file a superseding Form 1065 and furnish Schedules K-1 on or before Sept. 15, 2019.

Under Rev. Proc. 2019-32, the IRS will treat the timely filing of Form 1065 by a partnership as a timely filed request for a six-month extension of the due date to file Form 1065 and furnish Schedules K-1. The relief is available only to partnerships that timely filed Form 1065 and timely furnished Schedules K-1 and also file a superseding Form 1065 and furnish corresponding Schedules K-1 on or before the date that is six months after the original due date.

The relief provided by Rev. Proc. 2019-32 effectively allows a partnership to correct Form 1065 and/or Schedules K-1 without having to file an administrative adjustment request (AAR) under the BBA rules. The filing of an AAR by a BBA partnership may have unintended consequences for partners, who would be obligated to take into account adjustments in the year in which the AAR is filed, and not the reviewed year to which the adjustments relate.

David Auclair
National Managing Principal
Washington National Tax Office
T +1 202 521 1515

Shamik Trivedi
Senior Manager
Washington National Tax Office
T +1 202 521 1511

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