Proposed International Changes to Form 1065, U.S. Return of Partnership Income for Tax Year 2021

 

The Treasury Department and the IRS are proposing updates to the partnership form for tax year 2021 (filing season 2022). The updates will provide greater clarity for partners on how to compute their U.S. income tax liability with respect to international tax matters, including how to compute deductions and credits. The redesigned form and instructions also give useful guidance to partnerships on how to provide international tax information to their partners.  This proposed form would apply to a partnership required to file Form 1065, but only if the partnership has items of international tax relevance (generally foreign activities or foreign partners). The proposed changes would not affect domestic partnerships with no items of international tax relevance.

The IRS is seeking comments from stakeholders during a 60-day period which will begin on the date of the press release.  Those interested are invited to send comments to lbi.passthrough.international.form.changes@irs.gov with the subject line: “International Form Changes.”

Upcoming Events

The American Bar Association (ABA), the American Institute of Certified Public Accountants (AICPA), and the Tax Executives Institute (TEI), along with the U.S. Treasury Department and the IRS, will be hosting two webinars to discuss the proposed redesigned partnership form for tax year 2021 (filing season 2022).   The proposed form is designed to provide greater clarity for partners on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits.  See press release for more information. Leaders from ABA, AICPA, TEI and the government will be facilitating a panel discussion which will include an overview of the new forms, what the government was trying to accomplish in designing the forms, and a question and answer period.    Written comments should be sent to the following email address: lbi.passthrough.international.form.changes@irs.gov with the subject line: "International Form Changes."

August 12th – 11 AM Eastern – CPE Eligible
The outbound (generally) components of the new forms:

  • Foreign tax credit
  • Subpart F income
  • Global intangible low-taxed income
  • Passive foreign investment company income
  • Foreign-derived intangible income
  • Distributions from foreign corporations to the partnership
  • Certain related party amounts paid or accrued in hybrid transactions or with hybrid entities

Duration: 2 hours
Format: Webinar (Register Now)
 

August 18th – 1 pm Eastern – No CPE
The inbound (generally) components of the new forms:

  • Base Erosion Anti-Abuse Tax
  • Income effectively connected with a U.S. trade or business
  • Fixed, determinable, annual, periodical income
  • Gain or loss of foreign persons from sale or exchange of certain partnership interests
  • Treatment of dividend equivalent payments

Duration: 1 hour
Format: Webinar (Register Now)

Draft Form and Instructions

DRAFT Form 1065, Schedule K-2 PDF, Instructions  PDF

DRAFT Form 1065, Schedule K-3 PDFInstructions  PDF