IRS RULES ON PARTNERSHIP RETURNS
August 1, 2019 - Douglas Myser
IRS rules on partnership returns. Many of the tax debt issues that we encounter happen because business owners do not classify themselves properly from the beginning of the business. Case in point a business we are dealing with where the partnership had the tax professional draw up the Corporate papers designating the structure of the company, filed years of tax returns under that classification, only to have the IRS reject nearly 6 years of business tax returns for an improper classification. We are in the process of having to re-file those returns, at the insistence of the Revenue Agent assigned to the case, and the partner's are not pleased with the person who originally filed those returns. IRS rules on partnership returns.
To allow partnerships that may have made errors on their 2018 tax returns a chance to correct those errors, the IRS is granting certain partnerships a chance to file superseding 2018 tax returns (Rev. Proc. 2019-32 (https://www.irs.gov/pub/irs-drop/rp-19-32.pdf). The relief applies to partnerships that had timely filed their Forms 1065, U.S. Return of Partnership Income, and Schedules K-1 (form 1065), Partner's Share of Income, Deductions, and Credits, etc,. for the 2018 tax year (March 15 for calendar year tax payers) and did not elect out of the new centralized partnership audit regime. Such partnerships will now be allowed an extension f time to file superseding 2018 Forms 1065 and Schedule K-1 by Sept. 15, 2019.
The Bipartisan budget act of 2015, P.L. 114-74, replaced the TEFRA partnership procedures with a centralized partnership audit regime that, in general, determines, assesses, and collects tax at the partnership level. Tax years of partnerships beginning in 2018 were the first tax years for which the centralized partnership audit regime was mandatory and the first tax years for which partnerships are prohibited form amending Schedules K-1 under Sec. 6031 (b). A number of partnerships have filed for extensions of time to file their 2018 returns and may file an original or superseding return by the extended due date of Sept. 15.
If you have a large tax debt to incorrectly filing tax returns or other mistakes of your own or someone else's making, we can help. We are a 35 year old Tax Resolution Services Firm that specializes in Tax Relief and the IRS Fresh Start Program. We know Payroll Tax debt relief as it is our specialty. This Tax Resolution Company has learned how to use precedent to its clients advantages.