What Form 1065-X (2022) Is For
Understanding partnership tax corrections can seem complex, but IRS Form 1065-X (2022) simplifies the process. Partnerships use Form 1065-X to correct errors or make adjustments to a previously filed Form 1065. The form applies to both amended returns and administrative adjustment requests (AAR). Partnerships may use it to correct partnership income, deductions, or other partnership-related items from a prior tax year.
The form serves two purposes. It allows non-BBA partnerships to file an amended return and BBA partnerships to request changes through an AAR. Partnerships subject to the BBA regime must file adjustments at the partnership level rather than at the partner level. In these cases, the partnership representative signs and files the form on behalf of all partners.
For a detailed breakdown of filing requirements, eligibility rules, and step-by-step instructions, see Form 1065-X: Amended Return or Administrative Adjustment Request (AAR) – A Complete Guide for 2022.
When You’d Use Form 1065-X
A partnership uses Form 1065-X to correct errors or make adjustments to a previously filed tax return. Common reasons include fixing incorrect partner income allocations, missing deductions, or errors in reporting partnership income or credits. Partnerships that operate under the BBA regime file an administrative adjustment request (AAR) instead of a standard amended return.
The form must generally be filed within three years of the original return’s due date or filing date, whichever is later. Once an administrative proceeding begins, a BBA partnership can no longer file an AAR for that tax year. Partnerships should act quickly once issues are found to avoid missed deadlines or additional penalties.
Key Rules or Details for 2022
For the 2022 tax year, partnerships must use the December 2022 revision of Form 1065-X. Using an outdated version may result in processing delays. Partnerships under the BBA regime must file under the centralized audit system unless they properly elect out.
Key updates for 2022
- The partnership representative must sign and submit the AAR partnership filing on behalf of all partners.
- Amended schedules and statements must show the corrected amounts for the reviewed year to ensure accurate reporting.
- The imputed underpayment calculation is required even when the result is zero to comply with BBA partnership rules.
- A partnership that elects to push adjustments to reviewed year partners must issue Form 8986 to each partner.
- Filing must be completed on paper for Form 1065-X, while Form 8082 may be used for electronic submissions.
Partnerships must also address the payment of any imputed underpayment at the time of filing or make an election to push it to partners. Failing to calculate or pay this amount may result in penalties and interest.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide for Business Income Tax Forms.
Step-by-Step (High Level)
Step 1: Determine Partnership Type
Identify whether the partnership falls under the BBA regime, TEFRA, or is exempt from both. The classification determines who can sign and file the amended return or AAR.
Step 2: Gather Documentation
Collect the original Form 1065, all schedules, statements, and supporting calculations. Ensure that each change is supported with proper records.
Step 3: Complete Part I and Part II
Mark whether the filing is an amended return or an administrative adjustment request. List each adjusted item, showing the amount reported initially, the change, and the corrected amount.
Step 4: Calculate Imputed Underpayment
For BBA partnerships, determine the imputed underpayment using the highest tax rate. This calculation must be attached even if no additional tax is owed.
Step 5: Explain Changes in Part V
Provide clear explanations for each amendment. Include detailed computations showing how the corrections were calculated.
Step 6: Attach Supporting Forms
Attach any revised schedules, such as Schedule K-1 or K-3. BBA partnerships filing an AAR must instead include Forms 8985 and 8986.
Step 7: Sign and Date the Return.
The partnership representative, tax matters partner, or authorized partner must sign the form. Unsigned returns will not be processed.
Step 8: Submit Payment if Required.
Pay any imputed underpayment or penalties due at the time of filing. Payments can be made through EFTPS, check, or money order.
Step 9: Mail to the Correct IRS Address
Send the complete return and attachments to the IRS service center where the original partnership return was filed.
Step 10: Retain Copies for Records
Keep a copy of the amended return, calculations, and proof of filing for at least three years from the date filed.
Common Mistakes and How to Avoid Them
- Partnerships sometimes use an outdated version of Form 1065-X, and they can avoid rejection by ensuring they download and file the most current form.
- Partnerships often omit required schedules, documentation, or explanations, and they can prevent delays by attaching all supporting details for every amended item.
- Some partnerships fail to obtain the signature of the correct partnership representative or authorized partner, and they can avoid this error by confirming who is authorized under the BBA regime.
- BBA partnerships occasionally neglect to calculate or report the imputed underpayment—even when it is zero—and they can prevent issues by completing this section as required.
- Filers sometimes mail Form 1065-X to the wrong IRS service center, and they can avoid misrouting by sending the form to the same center that processed the original partnership return.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
After submission, the IRS reviews the amended return or AAR for accuracy and completeness. If the partnership pays an imputed underpayment, the payment is applied to the year in which the adjustment is made. When adjustments are pushed out, reviewed year partners must report them on their own returns.
The IRS may contact the partnership representative if clarification or additional documentation is needed. Processing times vary, and some adjustments may also require amended state returns. Interest and penalties can apply for late payments or incorrect filings.
FAQs
What is IRS Form 1065-X (2022) used for?
IRS Form 1065-X (2022) allows partnerships to correct errors or make an administrative adjustment request on a previously filed Form 1065. It is filed to amend partnership income, deductions, and partners’ share allocations for the reviewed year.
Who must sign the amended return or AAR partnership filing?
The partnership representative must sign and submit the amended return or AAR on behalf of the partnership’s partners. Under the Bipartisan Budget Act (BBA) regime, only the designated representative is authorized to file and sign the form.
When should a partnership file an amended return or AAR?
A partnership files an amended return or an administrative adjustment request when it discovers errors after submitting its tax return. This must generally be done within three years from the original filing date or due date for that tax year.
How are the reviewed year partners affected by adjustments?
Reviewed year partners must report adjustments to income, deductions, and credits on their own tax returns. When a BBA partnership elects to make adjustments, Forms 8985 and 8986 are issued to notify each partner of their updated information for the reviewed year.
What happens if a partnership fails to calculate the imputed underpayment?
Failing to calculate and pay the imputed underpayment can result in penalties, interest, and delays. The IRS may issue a notice or letter requiring additional information or payment to reconcile the partnership’s account for the adjustment year.
For more resources on filing or understanding prior-year IRS forms, visit our Form Summaries and Guides Library.
