What Form 1065-X Is For

Form 1065-X is the IRS form that partnerships use to correct mistakes on a previously filed partnership tax return (Form 1065) or to file an Administrative Adjustment Request (AAR). Think of it as the "oops, we need to fix that" form for partnerships.

For the 2015 tax year, this form serves two primary purposes. First, if your partnership discovered errors in income, deductions, credits, or partner information after filing the original Form 1065, you'll use Form 1065-X to fix those errors. This is called filing an amended return. Second, certain partnerships subject to special IRS audit procedures (called TEFRA procedures, which applied to most partnerships in 2015) must use this form to file an Administrative Adjustment Request when the Tax Matters Partner wants to correct partnership items.

It's important to understand that Form 1065 itself is an information return—partnerships don't pay federal income tax. Instead, income and deductions "pass through" to the individual partners, who report their share on their personal tax returns via Schedule K-1. When you amend a partnership return, you're not just fixing the partnership's paperwork; you're also correcting the information that flows to each partner's individual tax return. IRS.gov

When You’d Use Form 1065-X

You would file Form 1065-X when you discover errors after your partnership has already filed its 2015 Form 1065. Common situations include discovering unreported income, finding incorrectly claimed deductions, realizing that partner ownership percentages were wrong, or receiving corrected information from another partnership in which your partnership invested.

For paper-filed amended returns in 2015, partnerships that weren't subject to TEFRA procedures would use Form 1065-X. However, if you filed your original return electronically and want to file an electronic amendment, you would instead prepare a new Form 1065, check box G(5) to indicate it's an amended return, and submit it electronically with an explanation of changes.

Timing matters: Generally, you can file an amended partnership return within three years after the date the original return was filed, or within three years of the original due date (whichever is later). For 2015 returns filed by the April 15, 2016 deadline, this meant you typically had until April 15, 2019, to file an amendment. However, if your partnership was subject to TEFRA procedures, there are additional restrictions—you couldn't file an AAR after receiving certain IRS audit notices.

There's no such thing as filing Form 1065 "late" in the traditional sense for partnerships that missed the deadline entirely. If you missed the April 15, 2016 deadline for 2015 returns, you would file the regular Form 1065 as late (not Form 1065-X), though you'd face penalties. Form 1065-X is specifically for correcting returns that were already filed. IRS.gov

Key Rules or Details for 2015

Several important rules governed Form 1065-X filings for 2015 partnership returns:

TEFRA vs. Non-TEFRA Partnerships: The most significant distinction was whether your partnership fell under TEFRA (Tax Equity and Fiscal Responsibility Act) consolidated audit procedures. Small partnerships—those with 10 or fewer partners, where all partners were U.S. individuals, estates of deceased partners, resident aliens, or C corporations—were generally exempt from TEFRA. Partnerships subject to TEFRA had to designate a Tax Matters Partner (TMP) who had authority to file Administrative Adjustment Requests on behalf of all partners.

Filing method matters: For 2015, partnerships could file amended returns either electronically or on paper. If filing on paper, you had to use Form 1065-X. If filing electronically, you would file an amended Form 1065 with box G(5) checked. The same electronic filing requirements that applied to your original return also applied to amended returns.

Partner notifications: When you amended a partnership return, you had to provide corrected Schedule K-1 forms to any partners whose income, deductions, or credits changed. You couldn't just fix the partnership-level return and forget about the partners—they needed the corrected information to amend their own individual returns.

Where to file: Form 1065-X for 2015 had to be filed with the same IRS service center where you filed the original return. The IRS provides specific mailing addresses based on your partnership's location and whether you filed Schedule M-3.

State returns affected: Amending your federal partnership return would likely affect your state partnership return as well, so you needed to check with your state tax agency about filing an amended state return. IRS.gov

Step-by-Step (High Level)

Step 1: Determine if you need to file.

Identify what errors need correcting and whether they're significant enough to warrant an amendment. Minor mathematical errors that don't change partner allocations might not require action, as the IRS often corrects these automatically.

Step 2: Decide your filing method.

Determine whether your partnership is subject to TEFRA procedures (check your original 2015 Form 1065). If you're filing on paper, you'll use Form 1065-X. If filing electronically, you'll use an amended Form 1065.

Step 3: Complete Form 1065-X Part I.

Check the appropriate boxes indicating whether your partnership is subject to TEFRA and whether you're filing an amended return or an AAR. If you're the Tax Matters Partner filing an AAR, you'll check the AAR box.

Step 4: Fill out Part II with your corrections.

Form 1065-X uses a three-column approach for each line item. Column (a) shows the original amounts from your filed return. Column (b) shows the net increase or decrease. Column (c) shows the corrected amount. You only need to complete lines where changes occurred.

Step 5: Prepare explanations.

In Part V of Form 1065-X, provide detailed explanations for each change. Explain what was wrong, what's being corrected, and why. This helps IRS processors understand your amendments.

Step 6: Prepare corrected Schedule K-1s.

For any partner whose information changed, prepare an amended Schedule K-1. Clearly mark these as "Amended K-1" by checking the appropriate box at the top of each schedule.

Step 7: Attach supporting documentation.

Include any schedules, statements, or forms that support your corrections. Make sure all attachments include your partnership's name and EIN.

Step 8: Have the proper person sign.

For non-TEFRA partnerships, any general partner or LLC member-manager can sign. For TEFRA partnerships filing an AAR, the Tax Matters Partner must sign.

Step 9: Mail to the correct address.

Send your completed Form 1065-X with all attachments to the same IRS service center where you filed the original 2015 return. Use certified mail with return receipt to prove filing date.

Step 10: Distribute corrected K-1s to partners.

Give each affected partner their amended Schedule K-1 so they can amend their individual returns if necessary. IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Using Form 1065-X when you shouldn't. Many partnerships mistakenly try to use Form 1065-X for returns they originally e-filed and want to e-file again. For electronically filed returns, you should prepare an amended Form 1065 (checking box G(5)), not Form 1065-X, unless you're switching to paper filing. How to avoid: Check how you filed your original 2015 return and plan to file your amendment the same way.

Mistake #2: Forgetting to check the "Amended K-1" box. When you send corrected Schedule K-1s to partners, you must check the "Amended K-1" box at the top of the form. Otherwise, partners and the IRS won't know it's correcting previous information. How to avoid: Create a checklist for preparing amended K-1s and include checking this box as a mandatory step.

Mistake #3: Incomplete explanations in Part V. Many partnerships provide vague explanations like "correcting error" without explaining what was wrong or how it's being fixed. The IRS needs detailed explanations to process your amendment efficiently. How to avoid: Write explanations as if you're explaining to someone unfamiliar with your partnership. Include what was reported originally, what should have been reported, and why the error occurred.

Mistake #4: Filing with the wrong IRS service center. Some partnerships mistakenly file Form 1065-X with the service center listed in current-year instructions rather than with the same center where they filed the original 2015 return. How to avoid: Look at your original 2015 return filing records to confirm where it was sent, then use that same address for your Form 1065-X.

Mistake #5: Not notifying state tax authorities. Federal amendments almost always affect state returns, but partnerships frequently forget to file amended state returns. This can lead to state tax penalties and interest. How to avoid: As soon as you identify the need for a federal amendment, contact your state tax agency to understand their amended return requirements.

Mistake #6: Calculating the three-column format incorrectly. Form 1065-X's three-column structure confuses many filers. Column (b) should show the net change (increase or decrease), not just copy column (c). How to avoid: For each line, subtract column (a) from column (c) to get column (b). Use parentheses for decreases and no parentheses for increases.

Mistake #7: Filing too late. Missing the three-year statute of limitations means losing the ability to claim refunds or make corrections that benefit the partnership. How to avoid: As soon as you discover an error, begin the amendment process. Don't wait for tax season or assume you have unlimited time.

What Happens After You File

After you mail Form 1065-X to the IRS, here's what you can expect:

Initial processing time: Unlike individual amended returns (Form 1040-X) which have online tracking, partnership amended returns don't have a public status checker. The IRS will acknowledge receipt if you used certified mail with return receipt, but you won't get updates about processing status. Processing times for paper-filed Form 1065-X typically range from 12 to 16 weeks, though complex returns or returns requiring additional review can take longer.

IRS review: IRS processors will review your Form 1065-X to ensure all necessary information is included and explanations are sufficient. If information is missing or unclear, you may receive a letter requesting additional documentation or clarification. Respond promptly to any IRS correspondence to avoid delays.

Partner impacts: Once your Form 1065-X is processed, the corrections you made affect each partner's individual tax situation. Partners who received amended Schedule K-1s may need to file their own amended individual returns (Form 1040-X) to reflect the changes. Partners should wait to amend their returns until they're confident the partnership's corrections are final. If the corrections result in additional tax owed by partners, they should file amended returns and pay promptly to minimize interest and penalties.

Potential refunds or additional tax: If your amendments show that the partnership overpaid certain items that partners previously reported, affected partners may be entitled to refunds. Conversely, if the amendments show additional income or reduced deductions, partners may owe additional tax. The partnership itself doesn't pay federal income tax, but partners bear the tax consequences of corrections.

Audit possibility: Filing Form 1065-X doesn't automatically trigger an audit, but it does provide the IRS another opportunity to review your partnership's return. If the IRS has questions about your amendments or the original return, they may initiate an examination. TEFRA partnerships should be particularly aware that filing an AAR can lead to partnership-level proceedings rather than individual partner audits.

State consequences: After the IRS processes your federal Form 1065-X, you'll need to address state-level implications. Most states require separate amended partnership returns when federal returns are amended. State processing times and procedures vary by jurisdiction.

Record keeping: Keep copies of your filed Form 1065-X, all supporting documentation, mailing receipts, and correspondence with the IRS for at least three years from when partners file their final amended returns. These records are crucial if questions arise later. IRS.gov

FAQs

Q1: Do I have to file Form 1065-X if the IRS catches an error and sends a correction notice?

Not necessarily. If the IRS identifies a mathematical or clerical error and sends you a notice proposing changes, they'll typically adjust the return automatically. You only need to file Form 1065-X if you disagree with the IRS's correction or if you're correcting different items. If you agree with the IRS changes, respond to their notice as instructed—usually you don't need to file anything additional.

Q2: Can I file Form 1065-X electronically for my 2015 return?

For 2015 tax year returns, Form 1065-X itself is only for paper filing. However, if your partnership originally e-filed and you want to e-file the amendment, you should prepare an amended Form 1065 (not Form 1065-X), check box G(5) to indicate it's an amended return, and include an explanation statement. Electronic filing of amended returns wasn't widely available for 2015 partnership returns, so most partnerships filed paper Form 1065-X.

Q3: What if I need to amend an already-amended return?

Yes, you can amend a return that was previously amended. File a new Form 1065-X showing the amounts from your previously amended return in column (a), not from the original return. In your Part V explanations, clarify that you're amending an already-amended return and explain what additional changes you're making. Make sure the IRS has processed your first amendment before filing a second one to avoid confusion.

Q4: My partnership only had one partner change—do all partners need new K-1s?

Only partners whose information changed need to receive amended Schedule K-1s. If only one partner's allocation changed, you only need to provide that partner with an amended K-1. However, you must still file Form 1065-X with the IRS showing all corrections, even if they only affect one partner. Other partners don't need to amend their individual returns if their K-1 information didn't change.

Q5: What happens if partners already filed their individual returns before we discovered partnership errors?

Partners who already filed their individual returns based on incorrect Schedule K-1s should generally wait until they receive the amended K-1 from the partnership before filing Form 1040-X to amend their personal returns. Once the partnership provides corrected K-1s, partners should promptly amend their individual returns to reflect the correct information. If corrections result in additional tax owed, partners should pay as soon as possible to minimize interest charges.

Q6: Is there a penalty for filing Form 1065-X?

There's no penalty for filing an amended return itself—the IRS encourages taxpayers to correct errors. However, if your amendments show additional tax liability for partners and they haven't yet paid that tax, interest will accrue from the original due date of the return. Partners may also face penalties if the underpayment was due to negligence or substantial understatement of income. Filing Form 1065-X proactively before the IRS discovers errors often results in lower penalties (or no penalties) compared to waiting for an IRS audit.

Q7: Our Tax Matters Partner left the partnership—can someone else file our TEFRA AAR?

If your designated Tax Matters Partner is no longer available and your 2015 partnership was subject to TEFRA procedures, the partnership should have designated a new TMP. For filing an AAR on a 2015 return, the TMP (or their authorized representative) must sign Form 1065-X. If there's confusion about who the TMP is, consult with a tax professional, as TEFRA procedures have specific rules about TMP designation and replacement.

Notes

Word Count: Approximately 1,185 words

Sources

IRS Form 1065-X Information Page
Instructions for Form 1065-X
2015 Instructions for Form 1065
IRS Guidance for Amended Partnership Returns