IRS Releases Proposed 2019 Forms 1065, 1120-S, and Schedules K-1

By:
Chris Gaetano
Published Date:
Oct 1, 2019
IRS

The IRS has released proposed new forms concerning partnership taxation that are meant to be simpler to fill out, and to incorporate changes from the Tax Cuts and Jobs Act. The draft forms include the following: 

Form 1065, U.S. Return of Partnership Income
Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc
2019 Form 1120-S, U.S. Income Tax Return for an S Corporation
Schedule K-1 , Shareholder’s Share of Income, Deductions, Credits, etc

The proposed new Form 1065 and its proposed K-1 ask for more information than before, which the IRS said is intended to aid the service in assessing compliance risk and identifying potential noncompliance while ensuring that compliant taxpayers are less likely to be examined.  The IRS believes these changes to Form 1065 and Schedule K-1 will improve tax administration in the partnership arena, an area of critical importance to the IRS. The 1120 and its K-1 had similar changes. 

Over the past decade and a half, tax filings by partnerships have seen an increase. For calendar year 2004, about 2.5 million partnerships filed Form 1065; by calendar year 2017, that number had risen to more than 4 million, an increase of 59 percent. The rise in filings by partnerships was considerably greater than the rise in filing by C-corporations and S-corporations, combined, which rose about 14 percent over the same time frame. This increase in filings reinforces the IRS’s need to improve the data available for its compliance selection processes. 

The draft 2019 Form 1065 and Schedule K-1, as well as the draft Form 1120-S and its Schedule K-1, are near-final forms. The drafts are intended to give tax practitioners a preview of the changes and software providers the information they need to update systems before the final version of the updated forms and schedules are released in December.

The IRS is now accepting comments for 30 days at IRS.gov/FormComments.

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