Form 1065-X is the IRS form that partnerships, electing large partnerships (ELPs), and real estate mortgage investment conduits (REMICs) use to correct mistakes on previously filed returns or request administrative adjustments. For the 2014 tax year, this form operated under different rules than today's system, primarily governed by TEFRA (Tax Equity and Fiscal Responsibility Act) procedures for most partnerships. Understanding when and how to use this form can help partnership tax matters partners avoid penalties and ensure accurate tax reporting.

What Form 1065-X Is For

Form 1065-X serves two primary purposes for partnerships filing for the 2014 tax year:

Amended Returns

Partnerships use this form to correct errors discovered on their original Form 1065 (U.S. Return of Partnership Income), Form 1065-B (for electing large partnerships), or Form 1066 (for REMICs). Common corrections include misreported income amounts, incorrect deductions, calculation errors, or missing schedules that affect the partnership's reported financial information. IRS.gov

Administrative Adjustment Requests (AAR)

For partnerships subject to TEFRA procedures in 2014, the Tax Matters Partner (TMP) could file Form 1065-X as an AAR to request changes to partnership items. This differs from a simple amended return because it triggers specific procedural rules under TEFRA that affect how adjustments flow through to partners. IRS.gov

The form operates as a reconciliation document, showing three columns: the original amounts filed, the net increase or decrease being requested, and the corrected amounts. Any supporting schedules that were incorrect on the original return should be attached in corrected form with the partnership's employer identification number (EIN) clearly marked.

When You’d Use Form 1065-X

Filing Deadlines

For 2014 partnership returns, you generally had three years to file Form 1065-X. Specifically, you could file within three years after the later of: (1) the date you actually filed your 2014 partnership return, or (2) the last day for filing that return (excluding extensions). For a calendar-year partnership, Form 1065 for 2014 was due April 15, 2015, meaning the deadline to file Form 1065-X would typically have been April 15, 2018. IRS.gov

TEFRA Partnerships Additional Limits

If your partnership was subject to TEFRA procedures (most partnerships with more than 10 partners or with ineligible partner types), you had to file the AAR before the IRS mailed a notice of final partnership administrative adjustment. This meant you couldn't wait until the IRS discovered errors—you needed to be proactive. IRS.gov

When NOT to Use Form 1065-X

You wouldn't file Form 1065-X if you were filing a superseding return (a replacement return filed before the original deadline including extensions), or if you were responding to an IRS audit notice that required specific response procedures. For 2014, partnerships also couldn't use this form to change their Tax Matters Partner designation or to file inconsistent treatment notices, which required Form 8082.

Key Rules or Details for 2014

TEFRA vs. Non-TEFRA Determination

The first critical step for 2014 filers was determining whether the partnership fell under TEFRA rules. A "small partnership" (10 or fewer partners, all of whom were U.S. individuals, estates of deceased partners, or C corporations) was generally exempt from TEFRA unless it elected to be covered. Partnerships with more than 10 partners or with trusts, foreign partners, S corporations, or other partnerships as partners were automatically subject to TEFRA procedures. IRS.gov

Tax Matters Partner Authority

For TEFRA partnerships, only the designated Tax Matters Partner could sign and file Form 1065-X as an AAR. The TMP had the exclusive authority to represent all partners in dealings with the IRS regarding partnership items. Individual partners could file their own AARs using Form 8082, but the partnership-level filing required TMP involvement. IRS.gov

Substituted Return Treatment

When filing an AAR for 2014, TEFRA partnerships could request "substituted return treatment." If the IRS granted this request, the changes would be treated as corrections of mathematical or clerical errors, allowing direct assessment of additional tax to partners without a full partnership-level proceeding. However, if the IRS denied substituted treatment, partners would need to file their own amended returns, and the IRS couldn't assess additional tax without conducting a partnership-level examination. IRS.gov

Where to File

Form 1065-X had to be mailed to the same IRS service center where the original 2014 Form 1065 was filed. The form could not be filed electronically in 2014—only paper filing was accepted.

Step-by-Step (High Level)

Step 1: Determine Your Partnership Status

Complete Part I, Section 1 of Form 1065-X to establish whether you're subject to TEFRA procedures. Answer the questions about partner count and partner types. Check the appropriate box indicating "Subject to TEFRA" or "Not subject to TEFRA." This determination drives all subsequent steps.

Step 2: Identify the Type of Filing

Indicate whether you're filing an amended return or an AAR. Non-TEFRA partnerships typically file amended returns. TEFRA partnerships filed by the Tax Matters Partner are AARs. If filing an AAR, decide whether to request substituted return treatment (recommended if changes are straightforward and beneficial to all partners).

Step 3: Complete the Three-Column Reconciliation

In Part II, enter Column (a) amounts from your original 2014 Form 1065, Schedule K. Column (b) shows the net increase (positive) or decrease (negative, in parentheses) for each line item. Column (c) shows the corrected amount. The form includes all income, deduction, credit, and other items that flow through to partners. Focus only on lines where changes occurred.

Step 4: Prepare Corrected Schedules K-1

If you're filing an amended return (non-TEFRA), you must prepare corrected Schedules K-1 for all partners, checking the "Amended K-1" box. These show each partner's corrected distributive share. For TEFRA AARs, the requirement depends on whether substituted return treatment is granted. Attach any supporting schedules, statements, or forms that explain the corrections with the partnership's EIN on each page.

Step 5: Explain Changes in Part V

Provide a clear, detailed explanation of why you're filing the amended return or AAR. Describe each change, reference the specific line items affected, and explain the reason for the error (calculation mistake, omitted income, incorrect classification, etc.). This narrative is critical for IRS processing.

Step 6: Obtain Proper Signature and Mail

The appropriate person must sign the form: any partner for non-TEFRA partnerships, or the Tax Matters Partner for TEFRA AARs. Mail the complete package to the IRS service center that processed your original 2014 return. Keep copies of everything filed.

Common Mistakes and How to Avoid Them

Mistake #1: Missing the Three-Year Deadline

Many partnerships discover errors years later during subsequent audits or when preparing later returns. However, once three years pass from the later of the filing date or due date, you've lost the opportunity to file Form 1065-X. Solution: Implement annual partnership return review procedures before finalizing each year's return, checking the prior year for errors that might need correction.

Mistake #2: Incorrect TEFRA Determination

Partnerships sometimes misclassify themselves as non-TEFRA when they're actually subject to TEFRA rules, or vice versa. This matters because the procedures and consequences differ substantially. Solution: Carefully count all partners as of the end of the tax year and identify each partner's type (individual, trust, partnership, etc.). Remember that married couples filing jointly count as one partner, but if each spouse has a separate interest, they count as two. IRS.gov

Mistake #3: Failing to Attach Corrected Partner Schedules K-1

When filing an amended return, partnerships must provide amended Schedules K-1 to all partners and attach copies to Form 1065-X. Forgetting these schedules delays processing and may result in rejection. Solution: Prepare amended K-1s simultaneously with Form 1065-X, double-checking that amounts in Column (c) reconcile to the sum of all partners' K-1s.

Mistake #4: Inadequate Explanation in Part V

Generic explanations like "correcting errors" don't give the IRS enough information to process the form efficiently. Solution: Provide specific details such as "Line 1, Ordinary Business Income: Original return understated income by $50,000 due to omission of December 2014 sales invoice #12345. Supporting documentation attached."

Mistake #5: Wrong Signatory

Having an unauthorized person sign the form, especially for TEFRA partnerships where only the TMP can sign an AAR, creates immediate processing problems. Solution: Verify the designated Tax Matters Partner from the original 2014 Form 1065 and ensure that person signs Form 1065-X. If the TMP has changed or is unavailable, special procedures may be required.

Mistake #6: Not Coordinating with Partners

When partnerships file Form 1065-X, partners typically need to file their own amended Forms 1040 (or other applicable returns) to report their corrected distributive shares. Failing to communicate this requirement creates mismatches. Solution: Notify all partners in writing about the amended return, provide them with corrected Schedules K-1, and explain the deadline for them to file their own amended returns (generally within three years of their original filing date).

What Happens After You File

Initial Processing Timeline

After mailing Form 1065-X to the IRS, expect minimal communication for several months. The IRS generally takes 8-12 weeks to begin processing partnership amended returns, though complex AARs under TEFRA can take significantly longer—sometimes 12-18 months or more. Unlike individual amended returns (Form 1040-X), there was no "Where's My Amended Return?" tracking tool for partnership Form 1065-X in 2014.

IRS Review and Potential Outcomes

The IRS examines Form 1065-X for mathematical accuracy, completeness, and consistency with the original return. For non-TEFRA amended returns, if everything is straightforward, the IRS may simply accept the changes without further contact. Partners would then file their amended individual returns to claim refunds or pay additional tax as needed. IRS.gov

For TEFRA AARs, the process is more complex. If you requested substituted return treatment and the IRS grants it, they'll treat your corrections as clerical errors and directly adjust partners' accounts accordingly, assessing additional tax or allowing refunds. If substituted treatment is denied or not requested, the IRS may open a partnership-level examination, issue a notice to the TMP, or simply take no action. IRS.gov

Judicial Review Rights

Under TEFRA rules for 2014, if the IRS failed to act on an AAR, the Tax Matters Partner could petition for judicial review in the U.S. Tax Court, U.S. Court of Federal Claims, or the appropriate U.S. District Court. However, this petition couldn't be filed until at least six months after filing the AAR, and had to be filed before two years elapsed (unless the IRS and TMP agreed in writing to extend this period). IRS.gov

Partner-Level Actions

Partners should receive corrected Schedules K-1 from the partnership. They then have three years from their own original return's filing date (or due date, if later) to file Form 1040-X or other applicable amended returns. Partners can claim refunds if their share of partnership income decreased or deductions increased, or they may owe additional tax if the reverse occurred. The IRS processes partner-level amendments separately from the partnership-level Form 1065-X.

State Tax Implications

Changes to the federal partnership return typically affect state partnership returns as well. Most states require amended state partnership returns when the federal return is amended. Partners must also amend their state individual or corporate tax returns. Deadlines and procedures vary by state, so check with each relevant state tax agency.

FAQs

Q1: Can I file Form 1065-X electronically for my 2014 partnership return?

No. For the 2014 tax year, Form 1065-X could only be filed by paper mail. Electronic filing of amended partnership returns wasn't available until later years, and even then with limitations. You must print, sign, and mail Form 1065-X to the appropriate IRS service center. IRS.gov

Q2: Do I need to file Form 1065-X if I discover a minor error that doesn't affect any partner's tax liability?

Generally, no. If the error is truly immaterial and affects only the partnership's internal record-keeping without changing any partner's distributive share, Schedule K-1 amounts, or tax-reportable items, filing an amended return is optional. However, if you're uncertain whether the error affects tax liability, consulting with a tax professional is advisable. Material errors should always be corrected.

Q3: What's the difference between Form 1065-X and Form 8082 for 2014 partnership corrections?

Form 1065-X is used to amend the partnership return itself or file an AAR on behalf of the entire partnership. Form 8082 is used by individual partners to report inconsistent treatment of partnership items on their personal returns, or for a partner to file a partner-level AAR. For TEFRA partnerships in 2014, the Tax Matters Partner used Form 1065-X for partnership-level corrections, while individual partners could use Form 8082 for their own adjustments. IRS.gov

Q4: If the IRS audited my partnership after I filed Form 1065-X, does the amended return affect the audit?

It depends on timing. If you filed Form 1065-X before the IRS issued a notice of examination or TEFRA partnership administrative adjustment (FPAA), the amended return becomes part of the IRS's examination and may either resolve issues or raise additional questions. If the IRS already issued an examination notice or FPAA, you generally cannot file Form 1065-X for those issues—the audit procedures control. Always consult with a tax attorney or CPA if an audit is pending.

Q5: Our partnership had 9 partners in January 2014 but 11 partners in December 2014. Are we subject to TEFRA?

Yes, most likely. The key phrase is "at all times during the year." If you had more than 10 partners at any point during 2014, or if any of your partners were ineligible types (trusts, foreign partners, partnerships, S corporations), you're subject to TEFRA procedures. The small partnership exception requires 10 or fewer eligible partners throughout the entire tax year. IRS.gov

Q6: How do I know if the IRS received my Form 1065-X?

For 2014 filings, the IRS didn't provide online tracking for Form 1065-X. The best practice is to mail it using a trackable method (certified mail, return receipt requested, or a commercial carrier with tracking). Once the IRS processes it, they may send a letter acknowledging receipt, but this isn't guaranteed for all cases. If you need confirmation, you can contact the IRS Business & Specialty Tax Line at 1-800-829-4933, though wait times can be long.

Q7: Will filing Form 1065-X trigger an IRS audit of my partnership?

Filing an amended return doesn't automatically trigger an audit, but it does subject the amended return to IRS review. If the changes are straightforward, clearly explained, and well-documented, the IRS typically processes them without extensive examination. However, large adjustments, unexplained changes, or patterns suggesting tax avoidance may increase audit risk. The key is thorough documentation and clear explanations in Part V of the form.

Additional Resources

• Instructions for Form 1065-X: https://www.irs.gov/pub/irs-pdf/i1065x.pdf
• About Form 1065-X: https://www.irs.gov/forms-pubs/about-form-1065-x
• IRS Internal Revenue Manual Section 4.31.4 (TEFRA Administrative Adjustment Requests): https://www.irs.gov/irm/part4/irm_04-031-004r

Sources: All information in this guide comes from official IRS sources noted above. For specific situations, consult a qualified tax professional or attorney familiar with partnership taxation.