Form 1065-X Tax Year 2019 Filing Checklist
Year-Specific Context for 2019
For tax year 2019, the Tax Cuts and Jobs Act provisions remain in effect as part of the 2018-2025 implementation period. Partnerships are subject to the BBA centralized audit regime for tax years beginning after December 31, 2017, unless a valid election to opt out is filed under Section 6221(b). Section 743(b) adjustments require separate reporting in Schedule K-1 boxes 11 and 13 with designated codes F and V, respectively. Section 163(j) of the business interest limitation continues to apply at 30 percent of adjusted taxable income.
Form-Specific Restrictions and Requirements
Form 1065-X cannot be used to file notice of inconsistent treatment under section 6222 for TEFRA partnerships or partner-level AAR under section 6227(d). Use Form 8082 instead for these purposes. BBA partnerships must file an AAR with the partnership representative or a designated individual's signature. TEFRA partnerships covering pre-2018 tax years require a tax matters partner's signature. REMICs with a startup date after November 9, 1988, require an officer or trustee signature, as per applicable state law. Paid preparers must include PTIN, not SSN, in the Paid Preparer Use Only section.
Ten-Step Compliance Checklist
Step 1: Confirm Taxable Year and Partnership Classification
Verify the tax year for which Form 1065-X is filed. For 2019 tax year filings, partnerships with tax years beginning in 2019 are subject to the BBA centralized audit regime, unless a valid Section 6221(b) election out was filed and remains in effect. The election applies only if the partnership has 100 or fewer eligible partners. Eligible partners include individuals, C corporations, S corporations, foreign entities treated as C corporations, and estates of deceased partners.
Determine whether the partnership is TEFRA-subject for pre-2018 tax years, BBA-subject for post-2017 tax years, or has made a valid BBA election out. Select the correct checkbox in Part I, Section 1 for TEFRA, NonTEFRA, or ELPs/REMICs. Select Section 2 for BBA AAR or Non-BBA filing. Partnerships cannot be both TEFRA and BBA subjects for the same tax year.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Step 2: Designate Appropriate Signatory Based on Partnership Type
For BBA partnerships covering tax years beginning after December 31, 2017, the partnership representative or designated individual must sign Item D, Section 2. The partnership representative has sole authority to act on behalf of the partnership and must have a substantial presence in the United States.
For TEFRA partnerships covering pre-2018 tax years, the tax matters partner must sign. The tax matters partner must be a general partner and a U.S. person. For electing large partnerships filing AAR for pre-2018 tax years, the partner with authority must sign the return. For REMICs, an authorized officer or trustee, as required by state law, must sign.
Obtain written proof of the current designation if the person signing is not listed on the original return. If changing the partnership representative concurrently with filing the AAR, attach Form 8979.
Step 3: Determine Filing Type—Amended Return or Administrative Adjustment Request
Select either Amended Return or Administrative Adjustment Request. An amended return corrects errors on a previously filed return and requires furnishing amended Schedules K-1 to partners for non-BBA partnerships. An AAR requests changes to partnership items under sections 6227, 6228, or 6252.
If filing AAR and the partnership is subject to BBA, complete Part I, Section 2, and determine whether adjustments result in an imputed underpayment. If modifications are requested per section 6227(b)(1) to reduce imputed underpayment, attach completed Form 8980 with the AAR.
For BBA AAR, indicate in Section 2 whether the partnership is electing under section 6227(b)(2) to have adjustments taken into account by reviewed-year partners rather than paying imputed underpayment at the partnership level.
Step 4: Verify Three-Year Filing Deadline Compliance
Amended returns, also known as AARs, must be filed within three years after the later of the date the original partnership return was filed or the last day for filing the original return, excluding any extensions. For calendar year 2019 partnerships that filed by the March 16, 2020, deadline, the three-year period ends March 16, 2023.
For TEFRA partnerships or REMICs, the amended return or AAR must be filed before a Notice of Final Partnership Adjustment is mailed. Confirm the original filing date from partnership records and calculate the deadline before submission. If the three-year period has expired, the IRS will reject the filing unless extended statute provisions apply.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Step 5: Complete Part II Line-by-Line Income and Deduction Adjustments
Enter original amounts from Schedule K as filed or as previously adjusted in column (a). Enter net change in column (b), showing increases as positive numbers and decreases in parentheses. Enter correct amounts in column ©. The sum of column (a) plus column (b) must equal column © for each line.
Part II, line 13 has been split for 2019 into line 13a for cash contributions and line 13b for noncash donations. Previously, contributions were reported on a single line, with separate cash and non-cash contributions listed according to partner records.
All other Schedule K items follow the 2019 instruction layout, including line 1 for ordinary business income or loss, line 2 for net rental real estate income or loss, lines 6a through 6c for dividends and dividend equivalents, line 12 for section 179 deduction, line 13 codes for other deductions including section 163(j) excess business interest, and line 20 for other information with codes.
Step 6: Attach All Required Supporting Schedules and Statements
If increased research credit is claimed via AAR, attach complete documentation, including identification of all business components to which section 41 research credit relates, all research activities performed for each element, names of individuals who performed each activity, information each individual sought to discover, and total qualified employee wage expenses, qualified supply expenses, and qualified contract research expenses. Reference Form 6765 calculations.
Label all copies of prior-year schedules. Copy Only—Do Not Process at the top to prevent duplicate processing. Attach amended Schedule K-1s if filing amended return for non-BBA partnership. Do not attach amended Schedule K-1s for BBA AAR; furnish Forms 8986 to partners instead.
Step 7: Calculate Imputed Underpayment for BBA AAR
If adjustments result in imputed underpayment per section 6225(b), complete the calculation by grouping adjustments into reallocation, credit, creditable expenditure, and residual groupings—net adjustments within subgroupings. Multiply total netted partnership adjustments by the highest federal tax rate in effect for the reviewed year under section 1 for individuals or section 11 for corporations. Add net positive adjustments from credit and creditable expenditure groupings.
Enter the total imputed underpayment on Form 1065-X, Part IV, line 1. Attach a supporting schedule that shows grouping and netting details. The calculation must demonstrate how adjustments were netted and how rates were applied. Any partner-specific adjustments must be appropriately allocated and accounted for.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
If imputed underpayment is zero or negative, no payment is required; however, complete the calculation schedule for IRS records. If the imputed underpayment is positive and no modifications or push-out elections apply, payment is due with the AAR filing.
Step 8: Elect Push-Out or Request Modifications
If BBA AAR results in positive imputed underpayment, the partnership may elect under section 6227(b)(2) to have adjustments taken into account by reviewed-year partners as an alternative to payment. A valid push-out election releases the partnership from imputed underpayment liability. Partners report their share of adjustments on their returns for the year the AAR is filed, not the reviewed year.
If no push-out election is made, the partnership may request modifications per section 6227(b)(1) to reduce imputed underpayment. Modifications include amended returns filed by partners that show a higher tax liability, tax-exempt partner status, a rate differential for partners taxed at lower rates, and specified passive loss adjustments. If modifications are requested, attach the completed Form 8980 with the AAR.
If a push-out election is made, prepare and furnish Form 8986 to each reviewed-year partner showing their share of adjustments. File Forms 8985 and 8986 with the AAR submission to the IRS. Partners receiving Form 8986 must report adjustments using the procedures in their Form 8986 instructions.
Step 9: Provide Complete Explanations in Part V
Enter the Part II or Part III line number before each item that has been changed. Provide the reason for the change and show the Schedule K box number and code for each partnership item adjusted. Detail any computations supporting the adjustments.
Show the imputed underpayment calculation in detail, including all grouping, subgrouping, netting, rate, and credit calculations. If modifications are applied to the imputed underpayment per section 6227(b)(1), explain each modification and attach Form 8980 showing the calculations.
If filing a protective AAR to preserve rights while uncertain facts remain, include a clear statement that it is a protective AAR and explain the essential nature of the adjustment. Reference any related litigation, administrative proceedings, or pending legislation affecting the adjustment.
Step 10: Sign, Assemble, and File with Appropriate Payment
For the BBA AAR, the partnership representative or a designated individual must sign and date the form on behalf of the entity's partnership representative. Item D, Section 2. The signature declaration states, under penalty of perjury, that statements were provided to the reviewed-year partners as instructed.
For TEFRA AARs covering pre-2018 tax years, the tax matters partner is responsible for signing and dating Item G in Section 1. For amended returns filed by non-BBA partnerships, any partner or LLC member may sign.
Attach Forms 8985 and 8986 if adjustments do not result in an imputed underpayment or if a push-out election was made. If imputed underpayment is positive and no valid push-out election was made, remit payment with Form 1065-X. Use electronic funds transfer through EFTPS or include a check payable to the United States Treasury, with a notation showing the partnership name, EIN, tax year, and Form 1065-X.
File the original with the IRS service center where the original return was filed. Retain a complete copy for partnership records for at least three years from the filing date. Provide amended Schedule K-1s to partners for non-BBA amended returns, or Forms 8986 to partners for BBA AARs, on the date of filing.
Line Changes for 2019
Line 13 Contributions Split
Before 2019, contributions were reported on a single line, as shown in 13. Beginning in 2019, line 13 is split into line 13a for cash contributions and line 13b for noncash donations. This change aligns with the increased reporting requirements for non-cash charitable contributions and allows for the separate tracking of contribution types.
Cash contributions include currency, checks, credit card payments, and payroll deductions. Noncash contributions include property, inventory, securities, real estate, and other nonmonetary donations. Partnerships must maintain documentation to support the fair market value of non-cash contributions.
Compliance Considerations
The instructions require specified information and signatures. Failure to complete all sections, provide the required documentation, or obtain a signature from the authorized person may delay processing or result in return rejection, as per IRS procedures. If a BBA partnership fails to designate a partnership representative, the IRS may appoint one in its place.
Partnerships filing an AAR with an imputed underpayment must calculate and pay the amount properly or elect a valid push-out to partners. Interest accrues on unpaid imputed underpayment from the due date of the reviewed year return. The IRS may assess additional amounts if calculations are incorrect or modifications are denied.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
