Changes to Filing of Amended Partnership Returns Under Revenue Procedure 2020-23

Outside of Internal Revenue Service building in Washington D.C.

On April 8, 2020, the IRS issued Revenue Procedure 2020-23 (Rev. Proc. 2020-23), which allows an eligible partnership to file an amended partnership return for taxable years beginning in 2018 and 2019 using Form 1065, U.S. Return of Partnership Income (Form 1065), with the “Amended Return” box checked, and issue an amended Partner’s Share of Income, Deductions, Credits, etc. (Schedule K-1), to each of its partners.

Eligible partnerships are only those Bipartisan Budget Act (BBA) partnerships that filed, prior to the issuance of Rev. Proc. 2020-23, Form 1065 and furnished Schedules K-1 for the partnership taxable years beginning in 2018 or 2019.

Prior to the release of Rev. Proc. 2020-23, BBA partnerships were subject to a cumbersome process to “adjust” their returns for tax years beginning January 1, 2018 or later. The Bipartisan Budget Act of 2015 prohibits BBA partnerships from amending Schedules K-1. Under the new centralized partnership audit regime for IRS audits, BBA partnerships are required to file Administrative Adjustment Requests (AAR), which allows the partnerships to “push out” adjustments to the partners, who would then pick up their share of adjustments on their tax returns for the year in which the AAR was filed.

We will continue to monitor updates for your tax, audit and advisory needs and provide updates on our blog. We welcome any questions or concerns you have at this time.

Lindquist von Husen & Joyce provides individual and business tax services. If you need assistance navigating the extensions and deadlines, contact Joe Huie, Principal, at 415-905-5444.


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