What IRS Form 1065 (2015) Is For
IRS Form 1065 (2015) is the U.S. Return of Partnership Income that partnerships and certain entities must file each year to report their income, deductions, credits, and other tax information to the IRS. The form helps the IRS verify the amount of income tax each partner owes on profits, capital gains, or losses reported through the partnership.
Every domestic partnership, including LLCs treated as partnerships for federal tax purposes, must complete and file Form 1065 unless it receives no income and has no deductions or credits. Taxpayers should ensure they use the correct version of the form for the tax year and keep a copy for their records.
When You’d Use Form 1065 for 2015 (Late or Amended Filing)
You would file a late or amended return for Form 1065 (2015) if you missed the original April 15, 2016, due date, received an IRS notice, or discovered an error that requires correction. Filing late is primarily about compliance and avoiding additional penalties or interest, rather than seeking a refund.
Common situations include:
- Missed Deadline: The business failed to file its partnership tax return on the required deadline.
- IRS Notices: The IRS issued a letter demanding the missing form or payment.
- Amended Return: The partnership found errors in income allocations, partner data, or deductions that need correction.
- Unpaid Balance: A balance due or a penalty triggered a notice requiring payment.
Since the statute of limitations for refunds has expired, you will not receive a refund for the 2015 year. However, filing helps avoid further issues with the IRS. Before completing the return, partnerships can review an IRS account transcript to verify prior filings, penalties, and credits applied to the 2015 tax year.
Key Rules Specific to 2015
- Final April 15 Deadline: The 2015 tax return was the last year due on April 15. Later years shifted to a March 15 due date.
- K-1 Penalties: Penalties for failing to furnish Schedule K-1s were $260 per K-1.
- ACA Reporting: Certain entities were required to report information related to the Affordable Care Act.
- Audit Rules: The Bipartisan Budget Act of 2015 introduced significant audit changes affecting large partnerships and estates, effective as of 2018.
If the IRS identifies unpaid amounts or unfiled forms, the IRS collection process may begin through notices, penalties, or enforcement action.
Step-by-Step (High Level)
Follow these steps to complete and file your 2015 partnership return correctly:
- Gather Transcripts: Request IRS account transcripts to find details about prior filings, penalties, or credits paid.
- Complete the Form: Use the official IRS Form 1065 (2015) version and prepare Schedule K-1s for each partner showing income, capital contributions, and profits.
- Attach Required Schedules: Include Schedule M-1 for book-tax reconciliation and Schedule L for balance sheets, along with other items as needed.
- File and Distribute: File electronically or by mail to the correct IRS address. Distribute each Schedule K-1 to partners so they can report their share of the income or losses.
- Keep Records: Retain copies of all forms, attachments, and supporting documentation such as interest statements and receipts.
For example, if a business receives $120,000 in income and pays $40,000 in deductions, the remaining profit must be reported on each partner’s K-1 according to their ownership share. Businesses that cannot pay the balance immediately may request an IRS payment plan using Form 9465 to avoid further penalties and interest.
Common Mistakes and How to Avoid Them
- Incorrect Partner Information: Always verify partner names, addresses, and taxpayer identification numbers.
- Book-Tax Reconciliation Errors: Make sure Schedule M-1 correctly reconciles book income to taxable income.
- Late or Missing K-1s: Provide partners with K-1s on time to avoid penalties.
- Unsigned Return: The form must be signed by a general partner or an authorized member of the LLC.
- Incorrect Due Date Assumption: Note that the 2015 filing deadline was April 15, not March 15.
- E-Filing Requirement: Partnerships with more than 100 partners were required to e-file their tax returns. Paper filing could result in penalties.
If penalties were assessed due to late filing or missing K-1s, partnerships may qualify for penalty abatement when reasonable cause can be demonstrated.
What Happens After You File
After you file Form 1065, the IRS will process the partnership tax return, which may take several weeks. Late filings often take longer. If issues arise, you might receive additional IRS correspondence requesting information or clarification.
If penalties are assessed, taxpayers may:
- Request a Payment Plan: Use Form 9465 to set up an installment agreement for any amount owed.
- Seek Penalty Relief: Ask for penalty abatement if there was a reasonable cause, such as a natural disaster or illness.
Partnerships generally do not pay tax directly. Instead, partners report their share of income, losses, credits, and capital gains on their individual returns. If you disagree with an IRS adjustment, you can file an appeal through the Office of Appeals. Lastly, if you're unsure which supplemental forms or schedules must accompany the 2015 return, the IRS Form Help Center provides guidance and links to the correct documents.
FAQs
What is IRS Form 1065 (2015) used for?
IRS Form 1065 (2015) reports the income, deductions, profits, and losses of partnerships and certain entities. It enables the IRS to determine the amount each partner owes in income tax and credits. Each partner receives a Schedule K-1, which shows their share of the business income, interest, and capital gains for the year.
How do I file a tax return if I missed the 2015 tax deadline?
You can still file a late tax return for 2015 to stay compliant. Complete the correct version of Form 1065, include all schedules, and mail it to the IRS address listed in the 2015 instructions. Filing late may not result in a refund, but it can reduce penalties and help protect future tax access.
Do I need to report capital gains on my 2015 partnership return?
Yes, capital gains, dividends, and similar profits earned by the partnership must be reported on Form 1065 and passed through to partners via Schedule K-1. Each partner includes their share of capital gains on their personal tax return to ensure that all income is reported correctly and paid.
When should I file an amended return for the 2015 tax year?
You should file an amended return if errors occurred on the original filing, such as incorrect partner information, omitted income, or changes to deductions or credits. Use a 2015-dated Form 1065 and mark it “Amended.” Send new K-1s labeled “Amended” to partners and update state filings if required.
What does the locked padlock icon mean on IRS pages?
The locked padlock icon on IRS.gov indicates that the page is secure and protected. It helps taxpayers know their information is protected when entering data or making a payment. Always check for the icon before sharing financial details or submitting forms online.
