Instructions for IRS Form 1065X "Amended Return or Administrative Adjustment Request (Aar)"

This document contains official instructions for IRS Form 1065X, Amended Return or Administrative Adjustment Request (Aar) - a tax form released and collected by the Internal Revenue Service (IRS), a subdivision of the U.S. Department of the Treasury. An up-to-date fillable IRS Form 1065X is available for download through this link.

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Download Instructions for IRS Form 1065X "Amended Return or Administrative Adjustment Request (Aar)"

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Instructions for Form 1065X
Department of the Treasury
Internal Revenue Service
(January 2019)
For use with Form 1065X (Revised September 2018)
Amended Return or Administrative Adjustment Request (AAR)
Purpose of Form
as defined by section 6223, which must
Section references are to the Internal Revenue
Code unless otherwise noted.
include the name, taxpayer identification
Use Form 1065X, if you are not filing
number, address, and daytime telephone
Future Developments
electronically, to:
number of the partnership representative.
Correct items on a previously filed Form
See Partnership Representative in the
For the latest information about
1065, Form 1065-B, or Form 1066;
Instructions for Form 1065.
developments related to Form 1065X and
Make an Administrative Adjustment
its instructions, such as legislation
Request (AAR) for a previously filed Form
The following representations must be
enacted after they were published, go to
1065, Form 1065-B, or Form 1066; or
made with regard to the statement at-
IRS.gov/Form1065X.
tached to the election.
File an amended return by a
The partnership is not insolvent and
partnership-partner of a BBA partnership
What's New
does not reasonably anticipate becoming
as part of the modification process of a
insolvent before resolution of any
BBA proceeding with respect to that BBA
Tax and payment. Form 1065X can be
partnership.
adjustment with respect to the partnership
used to report an imputed underpayment
tax year for which the election is being
(IU) and any interest and penalties related
Form 1065X cannot be used to file a
made.
to that IU.
notice of inconsistent treatment under
The partnership has not voluntarily filed,
section 6222 (TEFRA or BBA) or a
Reminders
and does not reasonably anticipate filing,
partner-level AAR under section 6227(d)
a petition for relief under title 11 of the
The Bipartisan Budget Act of 2015 (BBA)
(under TEFRA proceedings). Continue to
United States Code.
created a new centralized partnership
use Form 8082, Notice of Inconsistent
The partnership is not subject to, and
audit regime generally effective for
Treatment or Administrative Adjustment
does not reasonably anticipate becoming
partnership tax years beginning after
Request (AAR), to make those changes.
subject to, an involuntary petition for relief
2017.
under title 11 of the United States Code.
Tax Equity and Fiscal Responsibility
The partnership has sufficient assets,
Election into BBA for tax years begin-
Act of 1982 (TEFRA) Proceedings.
and reasonably anticipates having
ning before 2018. A partnership may
The consolidated audit proceedings of
sufficient assets, to pay a potential IU with
make an election into the centralized
sections 6221 through 6234 (prior to
respect to the partnership tax year that
partnership audit regime for tax years that
amendment by BBA) are referred to as
may be determined under subchapter C of
begin after November 2, 2015, and before
TEFRA proceedings and partnerships that
chapter 63 of the Internal Revenue Code
January 1, 2018, by filing an AAR. Please
are subject to TEFRA proceedings are
as amended by BBA.
refer to Regulations section 301.9100-22
referred to as “TEFRA partnerships.”
A representation, signed under
for detailed information. If the AAR is filed
TEFRA proceedings will not apply to
penalties of perjury, that the individual
on paper, the partnership uses Form
partnerships with tax years beginning after
signing the statement is duly authorized to
1065X, Amended Return or Administrative
2017. A partnership with a tax year
make the election described in
Adjustment Request (AAR), and must
beginning before 2018 that is not subject
Regulations section 301.9100-22 and that,
make the election in accordance with
to TEFRA proceedings is referred to as a
to the best of the individual's knowledge
section 1101(g)(4) of BBA.
“nonTEFRA partnership.”
and belief, all of the information contained
Making the election for eligible tax
Bipartisan Budget Act. All partnerships
in the statement is true, correct, and
years on an AAR filed on paper. To
with tax years beginning after 2017 are
complete.
make the election on an AAR filed on
subject to the centralized partnership audit
The statement must be signed and
paper, the partnership must write across
regime unless eligible partnerships elect
dated by the tax matters partner, as
the top of Form 1065X used to file the
out by making a valid election under
defined under section 6231(a)(7) (prior to
AAR, “Election under Section 1101(g)(4)”
section 6221(b). For purposes of these
the amendment by BBA), and the
and attach a statement to the AAR with
instructions (unless otherwise noted), the
applicable regulations, or an individual
the following information.
centralized partnership audit regime
who has the authority to sign the
The partnership's name, taxpayer
proceedings under sections 6221 through
partnership return for the tax year. The
identification number, and the partnership
6241 will be referred to as BBA
fact that an individual dates and signs the
tax year for which the election is being
proceedings.
statement making the election shall be
made.
If you are a nonTEFRA partnership
prima facie evidence that the individual is
The name, taxpayer identification
(see items B and C in Part I, Section 1) or
authorized to make the election on behalf
number, address, and daytime telephone
a nonBBA partnership (defined under
of the partnership.
number of the individual who signs the
Definitions, later) filing an amended return
statement.
electronically, use Form 1065. If you are
Note. Unless otherwise noted, references
Language indicating that the
to sections 6221 through 6241 are to
not filing electronically, use Form 1065X.
partnership is electing application of
Internal Revenue Code sections as
Do not use Form 1065X to file any of
section 1101(c) of BBA for the partnership
amended by BBA.
the following if the amended return or AAR
return for the eligible tax year.
is required to be filed electronically or you
The information required to properly
are electing to file the amended return or
designate the partnership representative
AAR electronically.
Jan 24, 2019
Cat. No. 57876S
Instructions for Form 1065X
Department of the Treasury
Internal Revenue Service
(January 2019)
For use with Form 1065X (Revised September 2018)
Amended Return or Administrative Adjustment Request (AAR)
Purpose of Form
as defined by section 6223, which must
Section references are to the Internal Revenue
Code unless otherwise noted.
include the name, taxpayer identification
Use Form 1065X, if you are not filing
number, address, and daytime telephone
Future Developments
electronically, to:
number of the partnership representative.
Correct items on a previously filed Form
See Partnership Representative in the
For the latest information about
1065, Form 1065-B, or Form 1066;
Instructions for Form 1065.
developments related to Form 1065X and
Make an Administrative Adjustment
its instructions, such as legislation
Request (AAR) for a previously filed Form
The following representations must be
enacted after they were published, go to
1065, Form 1065-B, or Form 1066; or
made with regard to the statement at-
IRS.gov/Form1065X.
tached to the election.
File an amended return by a
The partnership is not insolvent and
partnership-partner of a BBA partnership
What's New
does not reasonably anticipate becoming
as part of the modification process of a
insolvent before resolution of any
BBA proceeding with respect to that BBA
Tax and payment. Form 1065X can be
partnership.
adjustment with respect to the partnership
used to report an imputed underpayment
tax year for which the election is being
(IU) and any interest and penalties related
Form 1065X cannot be used to file a
made.
to that IU.
notice of inconsistent treatment under
The partnership has not voluntarily filed,
section 6222 (TEFRA or BBA) or a
Reminders
and does not reasonably anticipate filing,
partner-level AAR under section 6227(d)
a petition for relief under title 11 of the
The Bipartisan Budget Act of 2015 (BBA)
(under TEFRA proceedings). Continue to
United States Code.
created a new centralized partnership
use Form 8082, Notice of Inconsistent
The partnership is not subject to, and
audit regime generally effective for
Treatment or Administrative Adjustment
does not reasonably anticipate becoming
partnership tax years beginning after
Request (AAR), to make those changes.
subject to, an involuntary petition for relief
2017.
under title 11 of the United States Code.
Tax Equity and Fiscal Responsibility
The partnership has sufficient assets,
Election into BBA for tax years begin-
Act of 1982 (TEFRA) Proceedings.
and reasonably anticipates having
ning before 2018. A partnership may
The consolidated audit proceedings of
sufficient assets, to pay a potential IU with
make an election into the centralized
sections 6221 through 6234 (prior to
respect to the partnership tax year that
partnership audit regime for tax years that
amendment by BBA) are referred to as
may be determined under subchapter C of
begin after November 2, 2015, and before
TEFRA proceedings and partnerships that
chapter 63 of the Internal Revenue Code
January 1, 2018, by filing an AAR. Please
are subject to TEFRA proceedings are
as amended by BBA.
refer to Regulations section 301.9100-22
referred to as “TEFRA partnerships.”
A representation, signed under
for detailed information. If the AAR is filed
TEFRA proceedings will not apply to
penalties of perjury, that the individual
on paper, the partnership uses Form
partnerships with tax years beginning after
signing the statement is duly authorized to
1065X, Amended Return or Administrative
2017. A partnership with a tax year
make the election described in
Adjustment Request (AAR), and must
beginning before 2018 that is not subject
Regulations section 301.9100-22 and that,
make the election in accordance with
to TEFRA proceedings is referred to as a
to the best of the individual's knowledge
section 1101(g)(4) of BBA.
“nonTEFRA partnership.”
and belief, all of the information contained
Making the election for eligible tax
Bipartisan Budget Act. All partnerships
in the statement is true, correct, and
years on an AAR filed on paper. To
with tax years beginning after 2017 are
complete.
make the election on an AAR filed on
subject to the centralized partnership audit
The statement must be signed and
paper, the partnership must write across
regime unless eligible partnerships elect
dated by the tax matters partner, as
the top of Form 1065X used to file the
out by making a valid election under
defined under section 6231(a)(7) (prior to
AAR, “Election under Section 1101(g)(4)”
section 6221(b). For purposes of these
the amendment by BBA), and the
and attach a statement to the AAR with
instructions (unless otherwise noted), the
applicable regulations, or an individual
the following information.
centralized partnership audit regime
who has the authority to sign the
The partnership's name, taxpayer
proceedings under sections 6221 through
partnership return for the tax year. The
identification number, and the partnership
6241 will be referred to as BBA
fact that an individual dates and signs the
tax year for which the election is being
proceedings.
statement making the election shall be
made.
If you are a nonTEFRA partnership
prima facie evidence that the individual is
The name, taxpayer identification
(see items B and C in Part I, Section 1) or
authorized to make the election on behalf
number, address, and daytime telephone
a nonBBA partnership (defined under
of the partnership.
number of the individual who signs the
Definitions, later) filing an amended return
statement.
electronically, use Form 1065. If you are
Note. Unless otherwise noted, references
Language indicating that the
to sections 6221 through 6241 are to
not filing electronically, use Form 1065X.
partnership is electing application of
Internal Revenue Code sections as
Do not use Form 1065X to file any of
section 1101(c) of BBA for the partnership
amended by BBA.
the following if the amended return or AAR
return for the eligible tax year.
is required to be filed electronically or you
The information required to properly
are electing to file the amended return or
designate the partnership representative
AAR electronically.
Jan 24, 2019
Cat. No. 57876S
An amended return or AAR for a
When a partnership's or REMIC's
attach Form 8302, Electronic Deposit of
TEFRA partnership (Form 1065).
federal return is changed for any
Tax Refund of $1 Million or More.
TIP
An amended return or AAR for an
reason, it may affect its state
Who Must Sign
electing large partnership (ELP) (Form
return. For more information, contact the
1065-B).
state tax agency to which the state return
NonTEFRA and nonBBA partnerships.
An AAR for a BBA partnership (Form
is filed.
Any partner or limited liability company
1065).
(LLC) member must sign the return. Form
Instead, use Form 8082 in conjunction
When To File
1065X is not considered to be a return
with Form 1065 or 1065-B.
unless it is signed. When a return is made
Generally, a partnership or REMIC may
Generally, the criteria used to
file an amended return or AAR to change
for a partnership by a receiver, trustee, or
determine whether the original Form 1065
assignee, the fiduciary must sign the
items on its return:
or Form 1065-B is required to be filed
return instead of the partner or LLC
1. Within 3 years after the later of:
electronically also are used to determine if
member. Returns and forms signed by a
The date on which the partnership
the amended return or AAR must be filed
receiver or trustee in bankruptcy on behalf
return for that year is filed, or
electronically.
of a partnership must be accompanied by
The last day for filing the partnership
For information on when Form 1065 is
a copy of the order or instructions of the
return for that year (excluding extensions);
required to be filed electronically, and how
court authorizing the signing of the return
and
to file an amended return or AAR for a
or form.
2. In the case of a TEFRA partnership
partnership, see the Instructions for Form
BBA partnerships. The partnership
or REMIC, before a notice of final
1065.
representative (PR) or designated
partnership administrative adjustment for
For information on when Form 1065-B
individual, if applicable, must sign the
that year is mailed to the Tax Matters
is required to be filed electronically, and
Form 1065X. See Partnership
Partner (TMP) or Tax Matters Person, or,
how to file an AAR for an ELP, see the
Representative, later, for the definition of a
in the case of an ELP, before the mailing
Instructions for Form 1065-B.
PR.
to the partnership a notice of partnership
administrative adjustment with respect to
Who Must File
TEFRA partnerships. The Tax Matters
that year.
Partner (TMP) must sign the amended
Amended return. Partnerships and Real
3. In the case of a BBA partnership,
return. See Tax Matters Partner, later, for
Estate Mortgage Investment Conduits
before a notice of an administrative
the definition of a TMP.
(REMICs) that become aware of incorrect
proceeding with respect to the tax year is
ELPs. The partner with authority (PWA)
items of income, deductions, etc., use
mailed under section 6231.
must sign the amended return. See
Form 1065X to correct their previously
4. In the case of a partnership that is a
Partner with Authority, later, for the
filed partnership or REMIC return. See
partner in a BBA partnership which is filing
definition of a PWA.
Specific Instructions, later, for information
an amended return for purposes of BBA
on completing Form 1065X as an
REMICs with a startup day after No-
partnership modification under section
amended return.
vember 9, 1988. For these REMICs,
6225(c)(2), in the time period specified
Form 1065X may be signed by any person
under section 6225(c).
AAR-Partnerships (except ELPs).
who could sign the return of the entity in
Partnerships that are subject to either BBA
What To Attach
the absence of the REMIC election. Thus,
or TEFRA proceedings use Form 1065X
the return of a REMIC that is a corporation
to file for an AAR. See Specific
If the corrected amount involves an item
or trust would be signed by a corporate
Instructions, later, for information on
that must be supported with a schedule,
officer or a trustee, respectively. For
completing Form 1065X as an AAR.
statement, or form, attach the appropriate
REMICs with only segregated pools of
schedule, statement, or form to Form
AAR under BBA. File Form 1065X if you
assets, the return would be signed by any
1065X. Include the entity's name and
are the partnership representative or
person who could sign the return of the
employer identification number (EIN) on
designated individual requesting an
entity owning the assets of the REMIC
any attachments. See the instructions for
administrative adjustment to correct a
under applicable state law.
Form 1065, 1065-B, or 1066 (as
previously filed partnership return on
REMICs with a startup day before No-
applicable) for a list of forms that may be
behalf of the partnership.
vember 10, 1988. These REMICs may
required.
AAR-ELPs. ELPs that are not required to
elect to apply the rules for REMICs with a
If the attachments needed to support
electronically file Form 1065-B and need
startup day after November 9, 1988 (as
the corrected amount include copies of
to correct errors on a previously filed Form
described in Regulations section
forms or schedules from previously filed
1065-B use Form 1065X to file for an
1.860F-4(c)(2)(iii)). Otherwise, Form 1066
tax returns, write at the top of each
AAR. See Specific Instructions, later, for
must be signed by a residual interest
previously filed form or schedule, “Copy
information on completing Form 1065X as
holder or, as provided in section 6903, by
Only—Do Not Process.”
an AAR.
a fiduciary as defined in section 7701(a)
(6) who is acting for the REMIC and who
A BBA partnership must attach a
AAR-REMICs. REMICs that do not meet
has furnished adequate notice as
schedule to Form 1065X that supports the
the small REMIC exception under sections
described in Regulations section
position(s) reported on Form 1065X which
860F(e) and 6231 (prior to amendment by
301.6903-1(b).
results in an IU as described in section
BBA), and related regulations, or make the
In the prior paragraph, the term “startup
6225(b). A BBA partnership must also
election described in section 6231(a)(1)
day” means any day selected by a REMIC
provide support for any modification of the
(B)(ii) (prior to amendment by BBA) not to
that is on or before the first day on which
IU that is allowed under section 6225(c) as
be treated as a small REMIC, use Form
interests in such REMIC are issued.
applied to a BBA AAR under section
1065X to file for an AAR. See Specific
Otherwise, startup day is the day on which
6227(b)(1).
Instructions, later, for information on
the REMIC issued all of its regular and
completing Form 1065X as an AAR.
In addition, if the ELP or REMIC
residual interests. However, a sponsor
requests that the IRS electronically
may contribute property to a REMIC in
deposit a refund of $1 million or more,
Instructions for Form 1065X
-2-
exchange for regular and residual
partnership adjustment relates. For
Sign the return in the space provided
interests over any period of 10
example, if the BBA AAR is filed to make
for the preparer's signature.
consecutive days and the REMIC may
an adjustment to income for the 2018 tax
Fill in the other blanks in the “Paid
designate any one of those 10 days as the
year, 2018 is the reviewed year.
Preparer Use Only” area of the return. A
startup day. The day so designated is then
paid preparer cannot use a social security
Tax matters partner (TMP). If the
the startup day, and all interests are
number in the “Paid Preparer Use Only”
partnership is subject to the TEFRA
treated as issued on that day.
box. The paid preparer must use a
procedures, it can designate a partner as
preparer tax identification number (PTIN).
the TMP for the tax year for which the
Where To File
Give the partnership or REMIC a copy
return is filed. The TMP is a general
of the return in addition to the copy to be
Form 1065X must be filed with the service
partner (in most cases, the TMP must also
filed with the IRS.
center where the original return was filed.
be a U.S. person) designated by the
partnership to represent the partnership in
Note. A paid preparer may sign original or
Definitions
TEFRA proceedings. The designation is
amended returns by rubber stamp,
made by completing the Designation of
mechanical device, or computer software
BBA partnership. A partnership that is
Tax Matters Partner section on page 3 of
program.
subject to the new centralized partnership
Form 1065 for tax years beginning before
audit regime will be known as a BBA
2018.
Interest and Penalties
partnership. All partnerships with tax years
Additionally, a REMIC may designate a
beginning after 2017 are BBA
tax matters person in the same manner in
Interest. Generally, interest is charged on
partnerships unless they make a valid
which a partnership may designate a TMP
taxes not paid by the due date, even if an
election out of the centralized partnership
under Regulations section 301.6231(a)
extension of time to file is granted. Interest
audit regime. A partner in a BBA
(7)-1. When applying that section, treat all
is also charged on penalties imposed for
partnership will be referred to as a BBA
holders of a residual interest in the REMIC
negligence, fraud, substantial valuation
partner. An AAR filed by a BBA
as general partners. The designation may
misstatements, substantial
partnership is referred to as a BBA AAR
be made by completing the Designation of
understatements of tax, and reportable
and must be filed by the PR.
Tax Matters Person section on page 3 of
transaction understatements. The interest
Partnership representative (PR). If the
Form 1066 for tax years beginning before
is charged from the due date (including
partnership is subject to the centralized
2018.
extensions) to the date of payment. The
partnership audit regime, section 6223
interest charge is figured at a rate
For an LLC, a member of the LLC is
provides that the partnership must
determined under section 6621.
treated as a partner and a
designate a partner or other person with a
Late payment penalty. The penalty for
member-manager is treated as a general
substantial presence in the United States
not paying the tax when due is usually
/
partner. A member-manager is any owner
1
2
as the PR who shall have the sole
of 1% of the unpaid tax for each month or
of an interest in the LLC who, alone or
authority to act on behalf of the
part of a month that the tax remains
together with others, has continuing
partnership. If the designated PR is an
unpaid. The penalty cannot exceed 25%
exclusive authority to make the
entity, the partnership must also appoint a
of the unpaid tax.
management decisions necessary to
designated individual to act on behalf of
conduct the business for which the LLC
the entity PR. All partners and the
Other penalties. Penalties can also be
was formed. If there are no elected or
partnership are bound by the actions of
imposed for negligence, substantial
designated member-managers, each
the PR in dealings with the IRS.
understatements of tax, reportable
owner is treated as a member-manager.
transaction understatements, and fraud.
NonBBA partnership. Under the BBA,
For details, see Regulations section
See sections 6662, 6662A, and 6663.
certain partnerships with 100 or fewer
301.6231(a)(7)-2.
eligible partners for the tax year can elect
Interest and penalties applicable to im-
Partner with authority (PWA). Each
out of the centralized partnership audit
puted underpayment (IU). Except when
ELP must designate a partner (or other
regime. Additional details regarding the
the partnership elects to have the partners
person) as the PWA who shall have the
election out of the centralized partnership
take into account the adjustments, BBA
sole authority to act on behalf of the
audit regime can be found in the 2018
partnership reviewed year interest and
partnership. See section 6255(b)(1) (prior
Instructions for Form 1065. A partnership
penalties are the following.
to amendment by BBA). If the partnership
that elects out of the centralized
The interest figured with respect to any
fails to designate a PWA, the IRS can
partnership audit regime will be referred to
IU is the interest which would be
select any partner to serve as the partner
as a nonBBA partnership.
determined under chapter 67 for the
with such authority. The PWA has the
period beginning on the day after the
Partnership-related items. Under
authority to file an AAR on behalf of the
return due date for the reviewed year and
section 6241(2)(B), a partnership-related
partnership. The PWA does this by filing
ending on the return due date for the
item is any item or amount with respect to
Form 1065X.
adjustment year as defined under section
the partnership that is relevant in
6225(d)(2) or, if earlier, the date the IU is
Paid Preparer's
determining the income tax liability of any
paid.
person, without regard to whether the item
Information
Any penalty, addition to tax, or
or amount appears on the partnership's
additional amount shall be determined at
If a partner or an employee of the
return and including an IU and an item or
the partnership level as if such BBA
partnership or REMIC completes Form
amount relating to any transaction with,
partnership had been an individual subject
1065X, the “Paid Preparer Use Only”
basis in, or liability of, the partnership.
to tax under chapter 1 for the reviewed
space should remain blank. In addition,
Reviewed year pass-through partner.
year and the IU were an actual
anyone who prepares Form 1065X but
For purposes of these instructions, under
underpayment (for understatement) for
does not charge the partnership or REMIC
the BBA, a reviewed year pass-through
such year for purposes of part II of
should not complete this section.
partner is a pass-through entity who held
subchapter A or chapter 68.
an interest in a BBA partnership at any
Generally, anyone who is paid to
Election to apply the alternative to
time during the reviewed year, which is the
prepare Form 1065X must do the
payment of the IU. If a BBA partnership
partnership tax year to which the
following.
Instructions for Form 1065X
-3-
elects the alternative to payment of the IU
If the entity's address is outside the
Partnership-partner amended
under sections 6227(b)(2) and 6226(c),
United States, or its possessions or
return related to modification of
interest shall be determined:
territories, enter the information on the line
another partnership’s IU. If a partner
At the partner level;
for “City or town, state, and ZIP code” in
that is itself a partnership
From the due date of the return for the
the following order: city, province or state,
(partnership-partner) is filing an amended
tax year to which the increase is
and foreign country. Follow the foreign
return as part of modification of the IU
attributable (determined by taking into
country's practice in placing the postal
under section 6225(c)(2), check this box.
account any increases attributable to a
code in the address. Do not abbreviate the
Section 1—TEFRA/NonTEFRA
change in tax attributes for a tax year
country name.
Determination
under section 6226(b)(2)), until the date of
Part I. Check the Appropriate
payment; and
Item A
Box
At the section 6621(a)(2)
If the answer to item A is “Yes,” the
underpayment rate.
In 2018, an AAR can be filed by a
partnership return is not subject to the
partnership subject to TEFRA
Protective TEFRA AARs
TEFRA proceedings. You should proceed
proceedings (TEFRA AAR), a partnership
to item E and check the “Not subject to
subject to BBA proceedings (BBA AAR),
Generally, a protective AAR is a request
TEFRA” box.
An electing large partnership (ELP), and a
for credit or refund based on current
REMIC.
Items B Through E
litigation or expected changes in tax law or
other legislation. The TMP or PWA files a
For partnership tax years beginning
These items are used to determine if the
protective AAR when the right to a refund
before January 1, 2018 (unless elect-
partnership is subject to the rules for
is contingent on future events and may not
ing into BBA).
consolidated audit procedures (TEFRA
be determinable until after the period for
procedures).
TEFRA AAR. The consolidated audit
filing an AAR has expired. Protective
proceedings of sections 6221 through
Consolidated REMIC proceedings.
AARs are subject to AAR statutes set forth
6234 (prior to amendment by BBA) are
Generally, the tax treatment of REMIC
in sections 6227, 6228, and 6229 (prior to
referred to as TEFRA proceedings and
items is determined at the REMIC level in
amendment by BBA). If you are a TMP
partnerships that are subject to TEFRA
filing on behalf of the partnership, the
a consolidated REMIC proceeding, rather
proceedings are referred to as “TEFRA
than in separate proceedings with
petition period described in section 6228
partnerships.” An AAR filed by the TMP of
individual residual interest holders. A
(prior to amendment by BBA) can be
the TEFRA partnership is a TEFRA AAR.
REMIC subject to consolidated REMIC
extended by using Form 9248, Agreement
Any partner in a TEFRA partnership can
procedures will have checked the box on
to Extend the Time to File a Petition for
also file an AAR using Form 8082. TEFRA
item G on page 3 of its original Form 1066.
Adjustment by the Tax Matters Partner
proceedings will not apply to partnerships
With Respect to Partnership Items.
Items B and C
with tax years beginning after 2017. A
A protective AAR must clearly state
All partnerships with tax years beginning
partnership with a tax year beginning
that it is a protective AAR, alert the IRS to
before 2018 (except ELPs) and REMICs
before 2018 that is not subject to TEFRA
the essential nature of the adjustment, and
ARE subject to TEFRA partnership audit
proceedings is referred to as a
specify the line item to be protected.
procedures unless the partnership or
“nonTEFRA partnership.”
REMIC is subject to the small partnership
Judicial review of an AAR (for returns
ELP AAR. The ELP procedures were
exception. See section 6231(a)(1)(B)
subject to the TEFRA procedures or
repealed for tax years beginning after
(prior to amendment by BBA).
ELPs). If the IRS fails to act on an AAR,
2017. However, ELPs filing a non-efiled
the TMP or PWA may file a petition for
AAR in 2018 for a tax year that began
A small partnership is a partnership
judicial review with the U.S. Tax Court,
before 2018 will still use the 2018 revision
with 10 or fewer partners at all times
U.S. Court of Federal Claims, or U.S.
of Form 1065X.
during the year. All partners must be U.S.
District Court. The TMP or PWA must file
individuals and their estates, resident alien
For partnership tax years beginning
the petition before the date that is 2 years
individuals, or C corporations. If both
after 2017 and partnerships electing
after the date the TMP or PWA filed the
these conditions are met, check the “Yes”
AAR, but not until after the date that is 6
into BBA for tax years beginning after
box for item B and item C.
November 2, 2015, and before 2018.
months from the date of such filing. The
2-year period may be extended if the IRS
BBA AAR. All partnerships with tax
Note. For making the small partnership
and the TMP or PWA agree in writing. For
years beginning after 2017 are subject to
determination, a husband and wife each
more details, see sections 6228 and 6252
the centralized partnership regime unless
having their own partnership interest are
(prior to amendment by BBA).
an eligible partnership makes a valid
considered one partner. An individual who
election under section 6221(b) to elect out
has passed away during the year and their
Specific Instructions
of the centralized partnership audit
estate are considered one partner.
regime. Partnerships electing into BBA for
Name and Address
Item D
tax years beginning after November 2,
Print or type the legal name of the entity,
A partnership defined as a small
2015, and before January 1, 2018, are
address, and EIN on the appropriate lines.
partnership can elect to be treated as a
also subject to the centralized partnership
Include the suite, room, or other unit
audit regime. Partnerships that are subject
TEFRA partnership for tax years
number after the street address. If the
beginning before 2018. The partnership
to the centralized partnership audit
Post Office does not deliver mail to the
elects TEFRA treatment by attaching a
procedures of sections 6221 through 6241
street address and the entity has a P.O.
statement to the tax return for the first year
will be referred to as “BBA partnerships.”
box, show the box number instead.
A partnership with a tax year beginning
they wish the election to be effective. This
after 2017 that is not subject to BBA
statement must be signed by all partners.
If the entity receives its mail in care of a
See Regulations section 301.6231(a)
proceedings because it has made a valid
third party (such as an accountant or
(1)-1(b). Form 8893, Election of
election under section 6221(b) is a
attorney), enter on the street address line
Partnership Level Tax Treatment, is the
nonBBA partnership. An AAR filed by a
“C/O” followed by the third party's name
BBA partnership is a BBA AAR.
statement that can be used to make this
and street address or P.O. box.
Instructions for Form 1065X
-4-
Item G
election. If you answer “Yes” to item D,
must furnish a statement to each reviewed
also enter the tax year of the filing of this
year partner that identifies the partner’s
A substituted return is an amended return
election in the space provided.
share of any adjustment to a
in which the TMP of the TEFRA
partnership-related item included in the
Item E
partnership requests that the treatment of
BBA AAR. A copy of the statements
an item shown on the AAR be substituted
If, at any time during the tax year, there
furnished to the reviewed year partners
for the treatment of the item on the
are more than 10 partners or any of the
must also be filed with the IRS.
pass-through entity's return. If the IRS
following are partners in the partnership,
If making this election, the BBA
allows substituted return treatment, the
then the partnership is not a small
partnership that is filing an AAR should
changes shown on the amended return
partnership.
consider all available guidance issued by
will be treated as corrections of
Another partnership.
the IRS to ensure that the statement
mathematical or clerical errors, and the
An LLC which files as a partnership or
provided to the partners and to the IRS is
IRS may credit or refund any overpayment
is treated as a disregarded entity.
complete.
of tax to the partners or residual interest
Any type of trust, including a grantor
holders based on the amended return or
Item D
trust.
assess any resulting tax without a
A nominee.
Each reviewed year partner is required to
deficiency or entity level proceeding. See
A nonresident alien.
take into account its share of adjustments
section 6227(c)(1) (prior to amendment by
An S corporation.
requested in a BBA AAR if the partnership
BBA).
adjustments result in an IU and the
IF in item...
The box
THEN in item E,
If the request is not treated as a
partnership makes the election discussed
checked
check...
substituted return, the IRS may credit or
under Item C. Additionally, each reviewed
is...
refund any overpayment of tax to the
year partner is required to take into
partners or residual interest holders per
account its share of any adjustments
B
No
Subject to TEFRA.
the request, conduct an examination of the
requested in a BBA AAR that do not result
C
No
Subject to TEFRA.
pass-through entity's return, or take no
in an IU. The determination of whether or
D
Yes
Subject to TEFRA.
action on the request. When a request is
not an adjustment results in an IU amount
not treated as a substituted return, the IRS
is discussed in Item B for this section.
B and C
Yes
Not subject to TEFRA.
cannot assess tax without a deficiency or
The partnership is required to furnish
D
No
Not subject to TEFRA.
entity level proceeding. See section
the reviewed year partner with a statement
6227(c)(2) (prior to amendment by BBA).
of its share of the BBA AAR adjustments.
ELPs. An ELP cannot request substituted
The statement signed by the partnership
Item F
representative attesting to the
treatment. See section 6251(b) (prior to
Check the box to indicate whether you are
partnership's compliance with this
amendment by BBA).
filing an amended return or an AAR.
requirement is included under Item D for
Section 2—BBA AAR
this section. The BBA partnership should
Amended Return. Check this box if you
consider all available guidance issued by
Item A
checked the “Not subject to TEFRA” box
the IRS to ensure that the statement
in item E, and you are not an ELP. This
If the "Yes" box is checked, complete
provided to the partners and to the IRS is
means that you are filing a request to
Form 8979 and attach it to the AAR. See
complete.
correct a previously filed nonTEFRA
the Instructions for Form 8979.
partnership return or REMIC return.
Special instructions for reviewed year
Item B
pass-through partners that receive a
If your partnership or REMIC return
statement related to an AAR. A
meets the exception under section
BBA partnerships filing an AAR will need
reviewed year pass-through partner that
860F(e) or section 6231 (prior to
to determine if the partnership
receives a statement from a BBA AAR
amendment by BBA), and does not file an
adjustments result in an IU. The BBA
partnership (directly or indirectly) can
election to be treated as a TEFRA
partnership should consider all available
choose to make a payment or furnish
partnership under section 6231(a)(1)(B)(ii)
guidance issued by the IRS in making a
statements to its partners. If making a
(prior to amendment by BBA), and you
determination of whether or not the AAR
payment, the pass-through partner should
received a corrected Form 1099 or are
results in an IU.
use the adjustments shown on the
making changes to income, deductions, or
Item C
statement it received to figure an IU using
credits, but there are no flow-through
If the adjustments contained in the BBA
procedures the BBA partnership uses to
changes from a TEFRA partnership, then
AAR result in an IU, then the partnership
figure an IU under section 6225. The
you are filing an amended return. Check
must pay the IU at the time that the AAR is
pass-through partner should include a
the “Amended Return” box.
filed. However, under section 6227(b)(2),
detailed payment calculation, a copy of
Administrative Adjustment Request
the partnership can elect to have its
the AAR statement it received, and a
(AAR). Check this box if you are filing a
reviewed year partners take the
check or an electronic confirmation
request to correct a previously filed
adjustments into account. This election is
number. Information to include on the
partnership or REMIC return and you are
an alternative to payment of the IU. See
payment is the name of the partnership,
one of the following.
section 6226(a)(2) for details. If the
“Form 1065,” the taxpayer identification
The TMP of the TEFRA partnership or
partners take the adjustments into
number of the partnership, the tax year,
REMIC. The REMIC must be subject to
account, the partnership is no longer liable
and “BBA AAR Push Out.” Checks must
consolidated REMIC proceedings. For
for the IU. If the adjustments contained in
be payable to the “United States
more information on consolidated REMIC
the BBA AAR do not result in an IU, the
Treasury.” If making an electronic
proceedings, see the Instructions for Form
partnership must follow the rules for the
payment, choose the payment description
1066.
reviewed year partners to take into
“BBA AAR Push Out” from the list of
An ELP correcting a previously filed
account the adjustments. If the
payment types. The payment should also
return.
adjustments do not result in an IU or the
include any applicable interest or
BBA partnership makes a valid election
penalties. See Interest and Penalties,
under section 6227(b)(2), the partnership
earlier.
Instructions for Form 1065X
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