What IRS Form 1065-B (2016) Is For
IRS Form 1065-B (2016) is a federal tax return created for electing large partnerships (ELPs) under section 775 of the Internal Revenue Code. It allowed partnerships with 100 or more partners during the prior tax year to report income, deductions, and other items at the partnership level. Tax professionals often use this form to prepare and electronically file the required information for eligible entities.
The form was applied to partnerships that operated on a calendar-year basis and served as an essential tax preparation document. Each partnership reported total income, applicable deductions, and profits or losses to determine the share of each partner’s tax responsibility. ELPs were required to file even if they reported no income or owed no payment.
When You’d Use Form 1065-B for 2016 (Late or Amended Filing)
A taxpayer may still need to file a late or amended return for the 2016 tax year if their partnership did not submit IRS Form 1065-B by the March 15, 2017, deadline, received IRS notices for non-filing, or discovered reporting errors. Late filings may result in penalties or affect refund eligibility, but completing the process ensures compliance.
Common reasons to file include verifying account records, correcting Schedule K-1 allocations, or responding to IRS correspondence. While refunds can no longer be claimed because the statute of limitations has expired, filing the correct form helps stop penalty accrual. It supports an accurate tax report for future reference.
Key Rules Specific to 2016
- Second-to-Last ELP Year: The ELP structure was repealed after the 2017 tax year, as per the Bipartisan Budget Act.
- Electronic Filing: Large partnerships were generally required to file their tax return if capable of doing so.
- K-1 Requirements: Schedules K-1 had to be provided to partners by March 15, 2017, regardless of filing status.
- Penalty Amounts: Late filing penalties were $195 per partner per month, capped at 12 months, which could significantly affect large partnerships.
- Audit Framework: In 2016, filings were still subject to TEFRA audit rules, rather than the centralized audit regime introduced later.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
- Gather Transcripts: Use Form 4506-T or visit IRS.gov to request transcripts of prior returns, payments, and account details.
- Prepare the 2016 Form: Always use the 2016 version, as the rules differ from those of current years and S corporation or subsidiary filing standards.
- Complete All Schedules: Include Schedules K, K-1, L, and other required forms based on your business activity, income, and deductions.
- File Correctly: E-file whenever possible. If you cannot electronically file, mail paper documents to the IRS at the address listed in Ogden, UT, for partnership returns.
- Maintain Records: Retain copies of all relevant documents, including K-1s and confirmation receipts, for a minimum of three years to support potential audits or penalty claims.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Using the Wrong Version: Always file the original 2016 IRS Form 1065-B to apply the correct rules and calculations.
- Ignoring E-File Requirements: Large entities must electronically file when technically capable to avoid penalties.
- Incorrect Partner Counts: Verify the number of partners and ensure the entity meets ELP eligibility before filing.
- Missing K-1 Deadlines: Distribute all K-1s by March 15, 2017, to prevent additional penalties.
- Mixing Audit Systems: Do not apply post-2017 partnership audit procedures to returns filed in 2016 or earlier years.
- Weak Penalty Relief Requests: Provide supporting evidence such as correspondence, illness records, or disaster documentation to justify reasonable cause claims.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
The IRS generally processes a late 2016 tax return within 8 to 16 weeks. Taxpayers filing by mail may experience longer timelines, while those who e-file receive faster confirmation. Filing stops further penalty accumulation but does not erase existing balances. If your partnership owes a payment, you may request penalty abatement or submit Form 843 to amend prior assessments.
Tax professionals recommend checking your IRS account to confirm posting, payment application, or balance due updates. If issues persist, you may contact the IRS Practitioner Priority Service or the Office of Appeals for further assistance.
FAQs
Can I still file IRS Form 1065-B (2016) for a missed tax year?
Yes, the IRS allows late submission of Form 1065-B (2016) for compliance purposes, even though refunds are no longer available. Filing ensures that the partnership’s income, deductions, and other items are correctly recorded and that any outstanding penalties are limited. Always refer to the 2016 version of the form for preparation and reference.
What penalties apply for a late tax return under the 2016 rules?
The late filing penalty was $195 per partner per month, up to 12 months. For example, a 100-partner entity filed six months late would owe $117,000. Partnerships should file promptly, even if no income or refund applies, to prevent additional charges on the account.
How do income tax and self-employment tax affect partners?
Each partner reports their share of the partnership’s profits, losses, and other items on their individual Form 1040. That income may be subject to income tax and, if applicable, self-employment tax. Taxpayers should review these figures carefully and pay any balance due to avoid interest or penalty assessments.
What are the electronic filing options for 2016 partnership returns?
Eligible entities could electronically file through approved IRS e-file providers. Electronic filing ensures faster processing and reduces the likelihood of mailing errors. If you cannot e-file, print the completed return and mail it to the IRS at the Ogden, UT. Always review deadlines and confirm the date the return was accepted.
Do tax professionals still assist with Form 1065-B and other items?
Yes, many tax professionals and enrolled agents continue to assist businesses with late or amended returns for prior years. They can help prepare accurate filings, gather documents, and answer partnership-specific questions. Visit IRS.gov or a qualified preparer’s office for free or limited-cost assistance depending on eligibility.
