Clarifications for Instructions for Form 8992 Regarding a Domestic Partnership that is a U.S. Shareholder of One or More Controlled Foreign Corporations (CFCs)

 

Generally, as provided in the instructions for Form 8992, a domestic partnership that is a U.S. shareholder of one or more CFCs must file Form 8992, but should enter the identifying information requested at the top of page 1 of Form 8992, skip Part I and Part II on page 1, and complete Schedule A.

These instructions are clarified to provide that a domestic partnership is not required to attach to its Form 1065 a Form 8992 with the domestic partnership's identifying information and a completed Schedule A, for a CFC if the partnership is a U.S. shareholder within the meaning of section 951(b) solely by reason of applying section 318(a)(3) (providing for downward attribution) as provided in section 958(b). However, a domestic partnership that is a U.S. shareholder in a CFC and owns any of the CFC stock under section 958 other than by reason of applying section 318(a)(3) (providing for downward attribution) continues to be required to attach to its Form 1065 a Form 8992 with the domestic partnership's identifying information and a completed Schedule A, for the CFC.

In addition, these instructions also clarify that a domestic partnership that is a U.S. shareholder of one or more CFCs is not required to attach to its Form 1065 a Form 8992 with the domestic partnership's identifying information and a completed Schedule A if the partnership knows that no direct or indirect owner of the domestic partnership (other than another domestic partnership) is a U.S. shareholder.

These changes are effective for tax years beginning in 2020.