- May 13, 2020
- Annemarie Aguanno
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BBA Partnerships Can Amend Returns for CARES Benefits
The IRS has set forth rules for BBA partnerships to file amended returns to immediately get benefits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136). “BBA partnerships” are those subject to the centralized partnership audit regime established by the Bipartisan Budget Act of 2015 (BBA) ( P.L. 114-74). The procedure allows BBA partnerships the option to file an amended return instead of an Administrative Adjustment Request (AAR) under Code Sec. 6227.
Amendment Option
BBA partnerships that filed Form
1065, U.S. Return of Partnership Income, and gave all partners
Schedules K-1, Partner’s Share of Income, Deductions, Credits, for the
tax years beginning in 2018 or 2019 before the IRS issued Rev. Proc.
2020-23 can file amended returns and furnish amended K-1s before
September 30, 2020. The amended returns can take into account tax
changes brought about by the CARES Act as well as any other tax
attributes to which the partnership is entitled by law.
Filing Requirements
To amend a return, a BBA
partnership must file a Form 1065, checking the “Amended Return” box and
furnish amended Schedules K-1 to partners. The BBA partnership must
write “FILED PURSUANT TO REV PROC 2020-23” at the top of the amended
return, and attach a statement with each Schedule K-1 sent to its
partners with the same notation. The BBA partnership may file
electronically or by mail.
There are additional rules for BBA partnerships that are currently under examination for a tax year beginning in 2018 or 2019, or that have previously filed an AAR.
GILTI Regulations
A partnership may continue to
apply the rules of Proposed Reg. §1.951A-5 when filing an amended Form
1065 and furnishing amended Schedules K-1 consistent with those proposed
regulations. The partnership must notify partners as required by Notice
2019-46, I.R.B. 2019-37, 695.