Modernized e-file (MeF) for Partnerships

Introduction

Section 1224, of the Taxpayer Relief Act of 1997, requires partnerships with more than 100 partners (Schedules K-1) to file their return on magnetic media (electronically as prescribed by the IRS Commissioner). This law became effective for partnership returns with taxable years ending on or after December 31, 2000.

Partnerships with 100 or less partners (Schedules K-1) may voluntarily file their return using the MeF Platform.

This Web site provides an overview of electronic filing and more detailed information for those partnerships that prepare and transmit their own income tax returns using MeF. Partnerships that rely upon third party tax professionals to prepare and transmit their tax returns should consult their tax professional.

What’s New for TY 2011

Merchant Card and Third Party Payment
New lines were added to Form 1065 to implement reporting of gross receipts received via Merchant Card and Third Party Network Payments.

Cost of Goods Sold
Schedule A (Cost of Goods Sold) was deleted from Form 1065 and Form 1065-B. Cost of Goods Sold is now reported on the new Form 1125-A, Cost of Goods Sold.

Schedule B Form 1065
New lines were added on Schedule B Form 1065

Schedule L Form 1065
New lines were added on Schedule L Form 1065

Schedule L Form 1065-B
New lines were added on Schedule L Form 1065-B

Form 8082
Form 8082, Notice of Inconsistent Treatment or Adminstrative Adjustment Request (AAR), has been revised and a Known Issue and Solution has been created for the electronic filers who will need to use this form.

Form 8938
Some partnerships may be required to file Form 8938, Statement of Specified Foreign Financial Assetments

Information for Partnerships About How to Participate in Electronic Filing

Partnerships that prepare their own income tax return must be authorized by the IRS as a “Large Taxpayer” or use a tax professional who is an IRS authorized e-file provider. The following documents are being updated to reflect important information for partnerships that will electronically transmit their tax returns instead of using the services of a third party authorized e-file provider.

e-Services Registration Process (PDF)

e-file Application for Large Taxpayers (PDF)

e-filing Form 8886, "Reportable Transaction Disclosure Statement"
Taxpayers required to e-file must provide Form 8886 in XML as part of the electronic return. They also are required to send paper copies of initial year filings of Form 8886 to the IRS Office of Tax Shelter Analysis showing the same information provided with the electronically filed Form 8886.

Approved IRS e-file Providers for Businesses
This page includes information on firms that provide e-filing products and services for business taxpayers, including those that file Form 1065 using the MeF Platform.

Electronic Communication between IRS and Transmitters during the e-file process
IRS communicates with the transmitter during the transmission and processing of an electronic return to ensure quick, accurate and timely electronic tax filing.

How MeF Systems are Approved for Electronic Filing
This overview explains the testing that is performed on IRS systems before they process electronic returns.

How Tax Preparation Software is Approved for Electronic Filing
IRS has a process required for software vendors in creating tax preparation software approved for electronic filing.

Security During Transmission of MeF Returns Using the Internet
IRS has safeguards and processes in place to ensure tax return data is secure during the electronic filing process.

Treasury Regulations on Required Partnership e-file

• Regulations Requiring the Use of Magnetic Media for Partnerships (PDF)
  These Treasury regulations describe the requirement for certain partnerships (those with more than 100 partners) to file their returns electronically.
  
• Regulations Eliminating e-file Impediments ( TD9300) (PDF) - These Treasury regulations revise signature and document attachment requirements that were determined to be an impediment to electronic filing of business tax returns.