The IRS has announced it is allowing partnerships to file an amended partnership return for 2018 or 2019 to take advantage of beneficial tax provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Partnerships subject to the centralized audit provisions in the Bipartisan Budget Act of 2015 (BBA), which are normally prohibited from filing an amended return after they have filed Form 1065 and provided Schedules K-1 to their partners, are now able to file an amended partnership return for 2018 or 2019 to take immediate advantage of the CARES Act provisions. Without this provision, partners generally would not have been able to take advantage of CARES Act benefits until they filed their current-year returns, which could be in 2021.
Under the revenue procedure, BBA partnerships that filed a Form 1065 and furnished all required Schedules K-1, Partner’s Share of Income, Deductions, Credits, etc., for the tax years beginning in 2018 or 2019 before this revenue procedure was issued may file amended partnership returns and furnish corresponding Schedules K-1 before Sept. 30, 2020. The amended returns may take into account tax changes brought about by the CARES Act as well as any other tax attributes to which the partnership is entitled by law. This relief is only available to BBA partnerships that already filed their returns, and the amended return replaces any previously filed return including any AAR.
A BBA partnership must file a Form 1065 (with the “Amended Return” box checked) and furnish corresponding amended Schedules K-1 to its partners. When filing, the BBA partnership should write “Filed pursuant to Rev. Proc. 2020-23” at the top of the amended return and attach a statement with each Schedule K-1 sent to the partners with the same notation. As always, filing electronically will speed the process.
For more information on how to take advantage of this development, please reach out to your BGW team members.