What the Form Is For

Form 1065-X is the IRS form that partnerships and similar entities use to fix mistakes on previously filed tax returns. Think of it as the “oops, we need to correct that” form for partnerships. Just like individuals use Form 1040-X to amend personal tax returns, partnerships use Form 1065-X to correct errors on Form 1065 (U.S. Return of Partnership Income).

The form serves two primary purposes:

1. Amended Return – Used by partnerships to correct items of income, deductions, credits, or other information they previously reported incorrectly.
2. Administrative Adjustment Request (AAR) – Used by partnerships subject to TEFRA (Tax Equity and Fiscal Responsibility Act) procedures to request adjustments at the partnership level rather than at the individual partner level.

Form 1065-X can also be used by:

• Real Estate Mortgage Investment Conduits (REMICs) filing Form 1066
• Electing Large Partnerships (ELPs) filing Form 1065-B

It replaced the old method of physically crossing out and correcting the original Form 1065, streamlining the amendment process.

When You’d Use Form 1065-X (Late/Amended)

When to File

You’d use Form 1065-X when your partnership discovers mistakes or omissions on a previously filed partnership return. Typical reasons include:

• Unreported income
• Overlooked deductions or credits
• Incorrect partner allocation percentages
• Mathematical or clerical errors
• Receiving corrected information (like amended K-1s from other partnerships)

Filing Deadlines

Non-TEFRA Partnerships:
Generally, you have 3 years from the date the original return was filed—or from the filing due date (excluding extensions), whichever is later—to file Form 1065-X.
Example: If your 2011 return was filed on April 15, 2012, you had until April 15, 2015 to amend it.

TEFRA Partnerships:
Must file an AAR within that same 3-year window, but before the IRS mails a final partnership administrative adjustment notice. If an IRS audit is already underway, your ability to file may close early.

⚠️ Note: Form 1065-X cannot be used for late original filings—only to correct previously filed returns.

Key Rules for 2011

TEFRA vs. Non-TEFRA Partnerships

This was the most important determination for 2011:

• Non-TEFRA: 10 or fewer partners, all of whom were U.S. citizens, resident aliens, C corporations, or estates. (Husband and wife counted as one partner.)
• TEFRA: Partnerships with 11+ partners or any partners that were trusts, S corporations, partnerships, or nonresident aliens.

If you were subject to TEFRA, you needed to file an AAR, not a simple amended return.

Small Partnership Exception

Small partnerships (10 or fewer qualifying partners) could elect into TEFRA by filing Form 8893. This was sometimes beneficial for centralized audit procedures.

Electronic Filing

In 2011, Form 1065-X could not be e-filed. Partnerships required to e-file (generally those with 100+ partners) had to use Form 8082 instead. Most smaller partnerships filed Form 1065-X on paper.

Partner Notification

Partnerships were required to prepare amended Schedule K-1s for affected partners:

• Non-TEFRA partnerships: Partners received amended K-1s and had to amend their own returns.
• TEFRA partnerships: Partners were notified that an AAR had been filed and received amended K-1s for recordkeeping.

Step-by-Step (High Level)

Step 1: Determine Your Partnership Type

Complete Items A–E on Form 1065-X to determine if your partnership is subject to TEFRA. This affects how you’ll file (amended return vs. AAR).

Step 2: Gather Documentation

Collect the original Form 1065, all schedules, and records supporting your corrections—bank statements, receipts, corrected 1099s, etc.

Step 3: Complete the Header

Provide your partnership’s name, EIN, address, and indicate where the original return was filed. Check the boxes that apply (e.g., amended return or AAR).

Step 4: Fill Out Part I or Part II

• Part I: For regular partnerships filing Form 1065-X
• Part II: For REMICs or ELPs
  Use the three-column layout:
• Column (a): Amounts originally reported
• Column (b): Net change (+/–)
• Column (c): Corrected amounts

Step 5: Complete Part III — Explanations

Provide clear, detailed explanations for each line changed. Include calculations or schedules. Avoid vague entries like “error correction.”

Step 6: Prepare Amended Schedule K-1s

Prepare corrected K-1s for all affected partners and check the “Amended K-1” box.

Step 7: Attach Supporting Documentation

Include any supporting statements or previously filed forms marked “Copy Only—Do Not Process.”

Step 8: Sign and File

• Non-TEFRA: A general partner or LLC member-manager signs.
• TEFRA: The Tax Matters Partner (TMP) must sign.
  Mail to the same IRS Service Center where the original Form 1065 was filed.

Step 9: Distribute Amended K-1s

Send the amended K-1s to affected partners:

• Non-TEFRA: Partners must amend their returns.
• TEFRA: Inform partners an AAR has been filed.

Common Mistakes and How to Avoid Them

Mistake #1: Wrong Form Type

Using Form 1065-X when required to e-file via Form 8082.
Fix: Verify if your partnership was required to e-file originally.

Mistake #2: Incomplete Explanations

Writing vague reasons like “calculation error.”
Fix: Provide detailed, line-specific explanations and math.

Mistake #3: Forgetting Amended K-1s

Failing to file and distribute corrected K-1s.
Fix: Always prepare and attach amended K-1s to Form 1065-X.

Mistake #4: Column (b) Sign Errors

Entering decreases incorrectly.
Fix: Use parentheses for decreases, e.g., “($10,000).”

Mistake #5: TEFRA Confusion

Filing an amended return instead of an AAR (or vice versa).
Fix: Review Items A–E and IRS instructions carefully.

Mistake #6: Wrong Filing Location

Sending Form 1065-X to a new address instead of where the original was filed.
Fix: File at the same IRS Service Center as your original return.

Mistake #7: Ignoring State Amendments

Forgetting that federal amendments often affect state filings.
Fix: Check each state where your partnership files to see if state-level amendments are required.

What Happens After You File

Processing Time

IRS processing generally takes 8–12 weeks, or longer for complex amendments.

Non-TEFRA Partnerships

The IRS reviews your amended return and K-1s. Partners must file their own Form 1040-X or Form 1120-X to reflect changes.

TEFRA Partnerships

The IRS may:

• Treat your AAR as a substituted return (with consent from the TMP)
• Initiate an audit
• Accept changes without a formal examination

IRS Requests or Disagreements

If the IRS questions your changes, it may request more documentation or propose adjustments. Respond promptly to avoid delays.

Refunds and Balances Due

• Refunds: Paid to partners via amended personal returns.
• Underpayments: Accrue interest from the original due date—pay quickly to minimize penalties.

Statute of Limitations

Filing Form 1065-X doesn’t extend the audit window, but large changes may trigger review.

Judicial Review for AARs

If the IRS takes no action on your AAR within 6 months, the TMP may file for judicial review in Tax Court, Court of Federal Claims, or District Court (within 2 years).

FAQs

Q1: Can I file Form 1065-X electronically for 2011?

Generally no. For 2011, Form 1065-X was paper-only. Partnerships required to e-file had to use Form 8082.

Q2: What if I need to amend multiple years?

File a separate Form 1065-X for each tax year. Mail each in its own envelope to avoid confusion.

Q3: Do my partners need to file amended returns?

• Non-TEFRA: Yes, partners must amend their returns using the new K-1s.
• TEFRA: Partners generally wait until the AAR process concludes.

Q4: Can the partnership get a refund?

Usually no. Partnerships are pass-through entities. Refunds flow to partners who amend their returns, unless the entity paid taxes directly (e.g., REMICs or ELPs).

Q5: What’s the difference between an amended return and an AAR?

• Amended Return: Filed by non-TEFRA partnerships.
• AAR: Filed by TEFRA partnerships for centralized adjustments.

Q6: Can partners file their own corrections?

No. Only the Tax Matters Partner (TMP) can file an AAR for TEFRA partnerships. Individual partners can file Form 8082 for personal-level issues.

Q7: What if I miss the 3-year deadline?

You generally can’t amend after 3 years unless exceptions apply (e.g., fraud, ongoing audits, or protective claims).

Final Notes

This guide is based on IRS Form 1065-X rules for the 2011 tax year. Regulations have since evolved, particularly with the BBA (Bipartisan Budget Act of 2015) partnership audit reforms.
For current instructions, visit IRS.gov/Form1065X.

Disclaimer: This material is for educational purposes only and is not tax or legal advice. Always consult a qualified tax professional for specific partnership filing situations.