FORM 1065-X (REV. DECEMBER 2021)
PAPER-FILING CHECKLIST FOR TAX
YEAR 2021
Why 2021 Form 1065-X Is Unique
For 2021, Form 1065-X distinguishes between TEFRA partnerships (pre-2018 tax years) and BBA partnerships (2018 and later), with the latter requiring partnership-level imputed underpayment calculations. Schedule K-2 and K-3 reporting for international items now flows to amended returns, thereby fundamentally expanding the scope of partnership documentation where foreign transactions occur.
Year-Specific Programs Applying to 2021
Partnerships with international tax items must report on Schedule K-2 and K-3, as per the 2021 guidance, when amending returns. PPP loan forgiveness adjustments require partnership-level AAR filing when tax-exempt income corrections affect K-1 allocations to partners. No EIP reconciliation or ACA employer shared responsibility provisions apply to Form 1065-X itself.
TEN-STEP CHECKLIST
Step 1: Determine Partnership Audit Regime Classification
Answer Part I Section 1 questions A–E to establish TEFRA status (for tax years before
January 1, 2018) or Part I Section 2 for BBA status (tax years beginning after December
31, 2017). If 10 or fewer partners at all times during the year, all partners are U.S.
citizens, resident aliens, C corporations, or estates of deceased partners, and the partnership did not file Form 8893, then check “Not subject to TEFRA.” For BBA partnerships, confirm whether adjustments result in an imputed underpayment and whether the section 6227(b)(2) election applies.
Step 2: Gather Required Documentation
Collect the original Form 1065 or 1065-B (as filed), all Schedules K-1 issued for the reviewed year, basis calculations, partnership operating agreement, prior amendments, and records of adjustments made since original filing. For partnerships with international
transactions, gather documentation supporting Schedule K-2 and K-3 entries. For PPP loan forgiveness adjustments, retain records supporting the timing of forgiveness income recognition and corresponding deduction adjustments.
Step 3: Complete Part I Section 1 (TEFRA/NonTEFRA) If Applicable
For tax years beginning before January 1, 2018, answer questions B and C. Confirm 10 or fewer partners and all partners meeting TEFRA partner requirements. If yes to both, the partnership is not subject to TEFRA and cannot file an AAR. If question D applies
(Form 8893 filed), answer yes or no. Check the appropriate box (Subject to TEFRA or
Not subject to TEFRA) in item E.
Step 4: Complete Part I Section 2 (BBA AAR) If Applicable
For tax years beginning after December 31, 2017, indicate whether the revocation of the immediately preceding partnership representative is revoked (if yes, attach Form 8979).
Answer whether adjustments result in an imputed underpayment. If yes, indicate the section 6227(b)(2) election status regarding whether adjustments have been taken into account by reviewed-year partners. Confirm statements provided to reviewed-year partners. If you are applying modifications to the imputed underpayment, answer yes and attach Form 8980.
Step 5: Complete Part II—Income and Deduction Adjustments
For partnerships filing Form 1065, enter three columns: (a) as reported initially or as previously adjusted, (b) net change (increase or decrease), and (c) correct amount. List all income items (lines 1–11), deduction items (lines 12–14), credits (line 15), and other information (lines 16–21). For the December 2021 revision, line 13a is labeled
“Contributions,” and line 13b is labeled “Investment interest expense” (no redesign occurs in 2021). Include line 21 for total foreign taxes paid or accrued.
Step 6: Complete Part III If Partnership Is ELP or REMIC
Use columns (a) description of item, (b) as initially reported, (c) net change, and (d)
correct amount. For ELPs, complete tax and payment lines 6 through 17. For REMICs, complete the appropriate sections. Do not furnish amended Schedules K-1 or
Schedules Q to partners or residual interest holders if filing an AAR.
Step 7: Complete Part IV—Imputed Underpayment Calculation
If the BBA partnership is filing AAR with adjustments resulting in an imputed underpayment, enter line 1 imputed underpayment amount and line 2 total amount due.
Show all computations in detail, including how imputed underpayment was calculated
and how modifications were applied. If requested changes are made, attach Form 8980 with supporting documentation as per Section 6225 regulations.
Step 8: Complete Part V—Explanations
For each line changed in Part II or Part III, enter the line number and the reason for the change. For partnerships, show the box number and code used to report the item on
Schedule K-1. Show computation detail. State how imputed underpayment was calculated. State how modifications were applied, if applicable.
Step 9: Attach All Required Schedules and Forms
Attach appropriate schedules for each corrected item per Instructions for Form 1065 or
1065-B. Include the partnership name and EIN on all attachments. For prior return copies, mark “Copy Only—Do Not Process.” If BBA AAR includes modifications, attach
Form 8980. If revoking a partnership representative, attach Form 8979. If applying tax-exempt partner modifications, attach Form 8983. If you are filing a partnership-partner amended return for modification purposes, attach Form 8982.
- Complete IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Sign, Date, and File expense” (unchanged from prior years)
For NonTEFRA or NonBBA partnerships, any partner or LLC member must sign. For
BBA partnerships filing an AAR, the partnership representative (or a designated individual if the PR is an entity) must sign. For TEFRA partnerships filing AAR, the tax matters partner (TMP) or partner with authority (PWA) must sign. Enter name, title, and date. Mail the return to the IRS service center where the original return was filed. Refer to the IRS Where to File page for the 2021 Form 1065-X specific service center address by state and asset amount. Do not e-file Form 1065-X (paper filing only for this form).
LINE CHANGES IN 2021
Line/Section: Part II, Line 13 (Contributions)
Wording Prior Year: Line 13a “Contributions”; Line 13b “Investment interest expense.”
Wording Current Year (2021): Line 13a “Contributions”; Line 13b “Investment interest
Change Type: No redesign occurs in the December 2021 revision. The separation into
“Cash contributions” and “Noncash contributions” takes effect in the August 2023 revision of Form 1065-X.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
