Form 1065-X Tax Year 2022 Paper Filing Checklist
Year-Specific Context
Form 1065-X for tax year 2022 reflects the complete application of the BBA centralized partnership audit regime, which has been in effect for partnerships with tax years beginning after December 31, 2017. The critical distinction for 2022 filings involves whether the partnership is subject to BBA procedures or has validly elected out under section 6221(b).
BBA partnerships filing for tax year 2022 must file Administrative Adjustment Requests rather than traditional amended returns. Non-BBA partnerships that made a valid election under section 6221(b) retain their amended return status. An imputed underpayment calculation is mandatory for all BBA AARs, even when the calculated amount is zero or negative, and must be supported by detailed schedules.
2022 Tax Year Programs and Requirements
For tax year 2022, partnerships under the Bipartisan Budget Act regime must file an AAR on Form 1065-X using paper filing rather than an amended Form 1065 with amended Schedules K-1. The centralized partnership audit regime, as outlined in sections 6221 through 6241, applies to all partnerships unless they have 100 or fewer eligible partners and have timely filed a valid election on Schedule B-2 with their original return.
Non-BBA partnerships with 100 or fewer eligible partners that made a valid and timely election out for 2022 may file an amended return on Form 1065-X with amended Schedules K-1. These partnerships do not require an imputed underpayment calculation or the designation of a partnership representative. The election out-of-time has been made on the timely filed original return, including extensions, and cannot be made retroactively via Form 1065-X.
Ten-Step Paper Filing Checklist
Step 1: Classify Partnership Audit Regime Status
Determine whether the partnership qualifies as BBA or non-BBA for tax year 2022. A partnership is non-BBA only if it has 100 or fewer eligible partners and filed a valid election on Schedule B-2 with the timely filed original return, including extensions. Eligible partners include individuals, C corporations, S corporations, foreign entities that would be treated as C corporations if domestic, and estates of deceased partners.
BBA partnerships must check BBA AAR in Part I, Section 2. Non-BBA partnerships check the appropriate box in Part I to indicate the amended return status. This classification determines whether an imputed underpayment calculation is mandatory, whether the partnership representative must sign, and whether Forms 8985 and 8986 are required for partner reporting.
Step 2: Gather Original Returns and Supporting Documentation
Obtain a complete copy of the partnership’s filed initially Form 1065, Form 1065-B, or Form 1066 for the reviewed tax year, which is the year being corrected. Collect all originally filed Schedules K-1 showing partner distributive shares. For tax year 2022, also gather Schedules K-2 and K-3 if the partnership reported items of international tax relevance.
Collect Schedule K showing partnership-level items, Schedule M-1 reconciling book and tax income, and Schedule M-2 analyzing partners’ capital accounts. For items that required supporting schedules, forms, or statements, such as Form 4562 for depreciation, Form 8825 for rental real estate income, or charitable contribution details, gather both the original attachments and the corrected versions.
Step 3: Identify Changes and Calculate Adjustments
For each partnership item requiring correction, determine three amounts: the amount as originally reported on Form 1065 Schedule K or the originally filed REMIC return, the net increase or decrease shown as positive for increases and in parentheses for decreases, and the corrected amount calculated as the sum of the original amount plus the net change.
Document the reason for each change in Part V with sufficient detail to explain what was incorrect on the original return and why the correction is being made. Include references to supporting documentation, third-party information returns, or computational errors. Organize changes by Schedule K line number for clarity.
Step 4: Determine Imputed Underpayment Applicability
For BBA partnerships only, calculate whether adjustments result in an imputed underpayment by applying the formula under section 6225(b). Group adjustments into reallocation, residual, creditable expenditure, and credit groupings. Net adjustments within each grouping according to the regulations. Multiply total netted partnership adjustments by the highest tax rate under section 1 for individuals or section 11 for corporations in effect for the reviewed year. Add the sum of net positive adjustments in credit and creditable expenditure groupings.
If the imputed underpayment is positive, answer yes to Part I, Section 2, Item B. If the imputed underpayment is zero or negative, or if adjustments do not result in an imputed underpayment under the netting rules, answer no. Complete this calculation even if the result is zero, and attach detailed supporting schedules that show all grouping, netting, and computation steps. The documentation requirement applies regardless of whether the imputed underpayment is positive, zero, or negative.
Step 5: Elect Push-Out or Imputed Underpayment Payment
If imputed underpayment is positive, the BBA partnership must choose between two options. The first option is to pay the imputed underpayment at the partnership level when filing the AAR with the IRS. The second option is to elect under section 6227(b)(2) to push out adjustments to reviewed-year partners, making them responsible for reporting and paying tax on their share of adjustments.
If electing push-out, check yes for Part I, Section 2, Item C. Prepare Forms 8985 and 8986 to furnish to each reviewed-year partner, showing their allocable share of adjustments. Partners report these adjustments on their returns for the year in which the AAR is filed, not the year being reviewed. If paying at the partnership level, prepare a payment calculation that includes any applicable interest, payable to the United States Treasury by check or money order, along with Form 1065-X.
Step 6: Prepare Amended Schedules K-1 or Forms 8986
For non-BBA partnerships filing amended returns for tax year 2022, prepare amended Schedule K-1 for each affected partner if any partner’s allocable income, deduction, credit, or other pass-through item changed. Mark each amended Schedule K-1 with an amended notation at the top or check the amended box if the form includes one.
For partnerships that filed Schedules K-2 and K-3 with the original return or if amendments affect items of international tax relevance, prepare amended Schedules K-2 and K-3. Mark the amended checkbox on these schedules. Furnish copies of all amended schedules to partners on or before the date Form 1065-X is filed.
For BBA partnerships filing AARs, do not prepare or furnish amended Schedules K-1. Instead, use Form 8986 to report adjustments to reviewed-year partners. Form 8986 is furnished only if adjustments do not result in an imputed underpayment or if the partnership makes a valid push-out election.
Step 7: Complete Part II or Part III
For Form 1065 amendments, complete Part II listing each changed item from Schedule K. Use three columns, showing the reported initial amount in column a, the net change as positive or negative in column b, and the correct amount in column c. Column (c) must equal column (a) plus column (b). Use parentheses for all decrease amounts in column (b).
For Form 1065-B or Form 1066 amendments, complete Part III instead of Part II. Describe each item being amended, and show the original amount, the net change, and the corrected amount using the same three-column format. Ensure mathematical accuracy across all entries and verify that corrected amounts reconcile to supporting schedules.
Step 8: Complete Part IV Imputed Underpayment Calculation
For BBA AARs, calculate and enter the imputed underpayment on Part IV, line 1. Attach detailed supporting computations showing the grouping and netting rules applied under the regulations, including reallocation groupings, residual groupings, creditable expenditure groupings, and credit groupings. Show how adjustments were netted within each grouping and how tax rates were applied.
The partnership is not paying imputed underpayment because it elected to push out adjustments to partners. If no imputed underpayment results from the netting calculations, enter zero on Part IV, line 1. Attach a statement explaining that adjustments do not result in a positive imputed underpayment or that the partnership elected a pushout under Section 6227(b)(2).
On lines 2 and 3, if the partnership is paying imputed underpayment at the partnership level, include the total payment amount with any prepaid estimated interest and penalties. Calculate interest from the due date of the reviewed year's return to the date of the AAR filing.
Step 9: Sign and Date Form 1065-X
For non-BBA partnerships filing amended returns, any partner or LLC member must sign and date Form 1065-X in the designated signature area. The signature certifies that the amended return is true, accurate, and complete, based on all available information.
For BBA partnerships filing AARs, the partnership representative or designated individual (if the partnership representative is an entity) must sign and date Form 1065-X in Section 2, Item D. Under penalty of perjury, the signature attests to the provision of all required statements to the reviewed-year partners as mandated by the instructions.
Include paid preparer information if a paid preparer completed the form. The preparer must use a PTIN in the Paid Preparer Use Only section. Social security numbers are not permitted for paid preparers. Do not file Form 1065-X without a proper signature and date. Unsigned forms are not considered valid returns and will be rejected.
Step 10: Assemble Attachments and File Within Deadline
Attach all required documents to Form 1065-X in the following order. For non-BBA partnerships, attach amended Schedules K-1 for all affected partners and amended Schedules K-2 and K-3 if applicable. For BBA partnerships filing AARs, attach Form 8986 if making a push-out election or if adjustments do not result in an imputed underpayment. Include Form 8985 showing the partnership-level statement of adjustments.
Attach Form 8980 if requesting modifications to the imputed underpayment under section 6225(c). Modifications include amended returns filed by partners, tax-exempt partner adjustments, rate differential adjustments, and other modifications allowed by the regulations. Attach Form 8979 if the partnership representative changed concurrently with the AAR filing.
Include any supporting schedules, forms, statements, or computations referenced in Part V explanations. If using copies of previously filed documents to show original amounts, mark the top of each page Copy Only—Do Not Process to prevent duplicate processing.
File Form 1065-X 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 extensions. For calendar year 2022 partnerships that filed by the March 15, 2023, deadline, the three-year deadline expires March 15, 2026. Mail the complete package to the IRS service center where the original partnership return was filed. Consult the current IRS Where to File instructions for Form 1065-X to verify the correct mailing address.
Form-Specific Limitations
Form 1065-X cannot be used to file a notice of inconsistent treatment under section 6222 for TEFRA or BBA partnerships. Use Form 8082 to report inconsistent treatment of partnership items. Form 1065 can also be used to file a partner-level AAR under Section 6227(d). Partners must use the procedures specified in section 6227(d) regulations.
For BBA partnerships, amended Schedules K-1 are not furnished to partners when filing an AAR. Use Form 8986 to report adjustments to review-year partners. Nonresident alien partners may not claim certain U.S. tax credits or deductions. Report their pass-through shares on Form 8986 with appropriate annotations.
Form 1065-X is only for paper filing. Partnerships cannot file Form 1065-X electronically. For the electronic filing of amended returns, or AARs, use Form 8082 in conjunction with Form 1065. This electronic filing option is available for partnerships that meet the requirements for mandatory or voluntary electronic filing.
2022 Revision Clarifications
The December 2022 revision of Form 1065-X includes no structural redesigns for Parts II through IV. However, Part IV instructions clarify that BBA partnerships must consist of the computation of imputed underpayment, even when the calculated amount is zero or negative. Supporting documentation must be attached showing all grouping, netting, and calculation steps.
Prior versions did not uniformly mandate this documentation requirement for zero imputed underpayment cases. The 2022 revision clarifies that all BBA AARs require complete imputed underpayment calculations with supporting schedules, regardless of the outcome. This ensures the consistent application of the BBA audit regime provisions and provides the IRS with the necessary information to review all AARs properly.
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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.
