1065X Instructions for Form 1065X Amended Return or Administra

Instructions for Form 1065X

Department of the Treasury
Internal Revenue Service

(January 2018)

Amended Return or Administrative Adjustment Request (AAR)
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments

For the latest information about
developments related to Form 1065X and
its instructions, such as legislation
enacted after they were published, go to
IRS.gov/Form1065X.

What's New

The Bipartisan Budget Act of 2015 (BBA)
created a new centralized partnership
audit regime effective for partnership tax
years beginning after 2017 unless the
partnership elects to have the new regime
apply to a partnership return filed for a tax
year beginning after November 2, 2015,
and before January 1, 2018. Beginning
January 1, 2018, certain partnerships may
elect to have the new centralized
partnership audit regime apply to a return
filed for an eligible tax year when filing an
Administrative Adjustment Request
(AAR). See AAR With Election Into the
Centralized Partnership Audit Regime
Under BBA, later, for more information on
how to make the election. An election can
also be made upon notification of an audit.
See Temporary Regulations section
301.9100-22T for additional details.

Purpose of Form

Use Form 1065X, if you are not filing
electronically, to:
Correct items on a previously filed Form
1065, Form 1065-B, or Form 1066; or
Make an Administrative Adjustment
Request (AAR) for a previously filed Form
1065, Form 1065-B, or Form 1066.
For the purposes of these instructions
(unless otherwise noted), consolidated
audit proceedings of sections 6221
through 6234 will be referred to as TEFRA
proceedings. In addition, partnerships that
are subject to the consolidated audit
proceedings of sections 6221 through
6234 will be referred to as “TEFRA
partnerships” and those partnerships that
are not subject to the consolidated audit
proceedings will be referred to as
“nonTEFRA partnerships.”
Form 1065X cannot be used to file a
notice of inconsistent treatment under
section 6222 or a partner-level AAR under
section 6227(d). Continue to use Form
8082, Notice of Inconsistent Treatment or
Administrative Adjustment Request
(AAR), to make those changes.

Jan 05, 2018

If you are a nonTEFRA
partnership (see Item E, later)
CAUTION electronically filing an amended
return, use Form 1065. If you are not filing
an amended return electronically, use
Form 1065X.

!

Do not use Form 1065X to file any of the
following if the amended return or AAR is
required to be filed electronically or you
are electing to file the amended return or
AAR electronically.
An amended return or AAR for a
TEFRA partnership (Form 1065).
An amended return or AAR for an
electing large partnership (ELP) (Form
1065-B).
An AAR by a partnership making an
election into the centralized partnership
audit regime under BBA.
An AAR by a partnership that filed a
2018 short tax period return for which an
election under section 6221(b) (as
amended by BBA) is not in effect.
Instead, use Form 8082. See the
Instructions for Form 8082 for more
information.
Generally, the criteria used to determine
whether the original Form 1065 or Form
1065-B is required to be filed electronically
also are used to determine if the amended
return or AAR must be filed electronically.
For information on when Form 1065 is
required to be filed electronically, and how
to file an amendment or AAR for a
partnership, see the Instructions for Form
1065.
For information on when Form 1065-B is
required to be filed electronically, and how
to file an amendment or AAR for an ELP,
see the Instructions for Form 1065-B.

Who Must File
Amended return. Partnerships and Real
Estate Mortgage Investment Conduits
(REMICs) that become aware of incorrect
items of income, deductions, etc., use
Form 1065X to correct their previously
filed partnership or REMIC return. See
Specific Instructions, later, for information
on completing Form 1065X as an
amended return.
AAR-Partnerships (except ELPs).
Partnerships that are subject to the
TEFRA proceedings use Form 1065X to
file for an AAR. See Specific Instructions,
later, for information on completing Form
1065X as an AAR.
Cat. No. 57876S

AAR-ELPs. ELPs that need to correct
errors on a previously filed Form 1065-B
use Form 1065X to file for an AAR. See
Specific Instructions, later, for information
on completing Form 1065X as an AAR.
AAR-REMICs. REMICs that do not meet
the small REMIC exception under sections
860F(e) and 6231, and related
regulations, or make the election
described in section 6231(a)(1)(B)(ii) not
to be treated as a small REMIC, use Form
1065X to file for an AAR. See Specific
Instructions, later, for information on
completing Form 1065X as an AAR.
When a partnership's or REMIC's

TIP federal return is changed for any

reason, it may affect its state
return. For more information, contact the
state tax agency to which the state return
is filed.

When To File

Generally, a partnership or REMIC may
file an amended return or AAR to change
items on its return:
1. Within 3 years after the later of:
The date on which the partnership
return for that year is filed, or
The last day for filing the partnership
return for that year (excluding extensions);
and
2. In the case of a TEFRA partnership
or REMIC, before a notice of final
partnership administrative adjustment for
that year is mailed to the Tax Matters
Partner (TMP) or Tax Matters Person, or,
in the case of an ELP, before the mailing
to the partnership a notice of partnership
administrative adjustment with respect to
that year.

What To Attach

If the corrected amount involves an item of
income, deduction, or credit that must be
supported with a schedule, statement, or
form, attach the appropriate schedule,
statement, or form to Form 1065X. Include
the entity's name and employer
identification number (EIN) on any
attachments. See the instructions for Form
1065, 1065-B, or 1066 (as applicable) for
a list of forms that may be required.
If the attachments needed to support
the corrected amount include copies of
forms or schedules from previously filed
tax returns, write at the top of each
previously filed form or schedule, “Copy
Only—Do Not Process.”

In addition, if the ELP or REMIC
requests that the IRS electronically
deposit a refund of $1 million or more,
attach Form 8302, Electronic Deposit of
Tax Refund of $1 Million or More.

startup day. The day so designated is then
the startup day, and all interests are
treated as issued on that day.

Who Must Sign

Form 1065X must be filed with the service
center where the original return was filed.

NonTEFRA Partnerships. One partner
or limited liability company (LLC) member
must sign the return. Form 1065X is not
considered to be a return unless it is
signed. When a return is made for a
partnership by a receiver, trustee, or
assignee, the fiduciary must sign the
return instead of the partner or LLC
member. Returns and forms signed by a
receiver or trustee in bankruptcy on behalf
of a partnership must be accompanied by
a copy of the order or instructions of the
court authorizing the signing of the return
or form.

Definitions

TEFRA Partnerships. The Tax Matters
Partner (TMP) must sign the amended
return. See Tax Matters Partner, later, for
the definition of a TMP.
ELPs. The Partner with Authority (PWA)
must sign the amended return. See
Partner with Authority, later, for the
definition of a PWA.
REMICs with a startup day after November 9, 1988. For these REMICs,
Form 1065X may be signed by any person
who could sign the return of the entity in
the absence of the REMIC election. Thus,
the return of a REMIC that is a corporation
or trust would be signed by a corporate
officer or a trustee, respectively. For
REMICs with only segregated pools of
assets, the return would be signed by any
person who could sign the return of the
entity owning the assets of the REMIC
under applicable state law.
REMICs with a startup day before November 10, 1988. These REMICs may
elect to apply the rules for REMICs with a
startup day after November 9, 1988 (as
described in Regulations section
1.860F-4(c)(2)(iii)). Otherwise, Form 1066
must be signed by a residual interest
holder or, as provided in section 6903, by
a fiduciary as defined in section 7701(a)
(6) who is acting for the REMIC and who
has furnished adequate notice as
described in Regulations section
301.6903-1(b).
In the prior paragraph, the term “startup
day” means any day selected by a REMIC
that is on or before the first day on which
interests in such REMIC are issued.
Otherwise, “startup day” is the day on
which the REMIC issued all of its regular
and residual interests. However, a
sponsor may contribute property to a
REMIC in exchange for regular and
residual interests over any period of 10
consecutive days and the REMIC may
designate any one of those 10 days as the

Where To File

Tax Matters Partner (TMP). If the
partnership is subject to the TEFRA
procedures, it can designate a partner as
the TMP for the tax year for which the
return is filed. The TMP is a general
partner (in most cases, the TMP must also
be a U.S. person) designated by the
partnership to represent the partnership in
TEFRA proceedings. The designation is
made by completing the Designation of
Tax Matters Partner section on page 3 of
Form 1065.
Additionally, a REMIC may designate a
tax matters person in the same manner in
which a partnership may designate a TMP
under Regulations section 301.6231(a)
(7)-1. When applying that section, treat all
holders of a residual interest in the REMIC
as general partners. The designation may
be made by completing the Designation of
Tax Matters Person section on page 3 of
Form 1066.
For an LLC, a member of the LLC is
treated as a partner and a
member-manager is treated as a general
partner. A member-manager is any owner
of an interest in the LLC who, alone or
together with others, has continuing
exclusive authority to make the
management decisions necessary to
conduct the business for which the LLC
was formed. If there are no elected or
designated member-managers, each
owner is treated as a member-manager.
For details, see Regulations section
301.6231(a)(7)-2.
Partner with Authority (PWA). Each
ELP must designate a partner (or other
person) as the PWA who shall have the
sole authority to act on behalf of the
partnership. See section 6255(b)(1). If the
partnership fails to designate a PWA, the
IRS can select any partner to serve as the
partner with such authority. The PWA has
the authority to file an AAR on behalf of
the partnership. The PWA does this by
filing Form 1065X.

Paid Preparer's
Information

If a partner or an employee of the
partnership or REMIC completes Form
1065X, the “Paid Preparer Use Only”
space should remain blank. In addition,
anyone who prepares Form 1065X but
does not charge the partnership or REMIC
should not complete this section.
-2-

Generally, anyone who is paid to
prepare Form 1065X must do the
following.
Sign the return in the space provided
for the preparer's signature.
Fill in the other blanks in the “Paid
Preparer Use Only” area of the return. A
paid preparer cannot use a social security
number in the “Paid Preparer Use Only”
box. The paid preparer must use a
preparer tax identification number (PTIN).
Give the partnership or REMIC a copy
of the return in addition to the copy to be
filed with the IRS.
Note. A paid preparer may sign original or
amended returns by rubber stamp,
mechanical device, or computer software
program.

Interest and Penalties
Interest. Interest is charged on taxes not
paid by the due date, even if an extension
of time to file is granted. Interest is also
charged on penalties imposed for
negligence, fraud, substantial valuation
misstatements, substantial
understatements of tax, and reportable
transaction understatements. The interest
is charged from the due date (including
extensions) to the date of payment. The
interest charge is figured at a rate
determined under section 6621.
Late payment penalty. The penalty for
not paying the tax when due is usually 1 2
of 1% of the unpaid tax for each month or
part of a month that the tax remains
unpaid. The penalty cannot exceed 25%
of the unpaid tax.
Other penalties. Penalties can also be
imposed for negligence, substantial
understatements of tax, reportable
transaction understatements, and fraud.
See sections 6662, 6662A, and 6663.

Protective AARs

Generally, a protective AAR is a request
for credit or refund based on current
litigation or expected changes in tax law or
other legislation. The TMP or PWA files a
protective AAR when the right to a refund
is contingent on future events and may not
be determinable until after the period for
filing an AAR has expired. Protective
AARs are subject to AAR statutes set forth
in sections 6227, 6228, and 6229. If you
are a TMP filing on behalf of the
partnership, the petition period described
in section 6228 can be extended by using
Form 9248, Agreement to Extend the
Time to File a Petition for Adjustment by
the Tax Matters Partner With Respect to
Partnership Items.
A protective AAR must clearly state
that it is a protective AAR, alert the IRS to
the essential nature of the adjustment, and
specify the line item to be protected.
Instructions for Form 1065X

Judicial review of an AAR (for returns
subject to the TEFRA procedures or
ELPs). If the IRS fails to act on an AAR,
the TMP or PWA may file a petition for
judicial review with the United States Tax
Court, United States Court of Federal
Claims, or United States District Court.
The TMP or PWA must file the petition
before the date that is 2 years after the
date the TMP or PWA filed the AAR, but
not until after the date that is 6 months
from the date of such filing. The 2-year
period may be extended if the IRS and the
TMP or PWA agree in writing. For more
details, see sections 6228 and 6252.

AAR With Election Into the
Centralized Partnership Audit
Regime Under BBA

The Bipartisan Budget Act of 2015 (BBA)
was enacted on November 2, 2015, and is
generally effective for partnership tax
years beginning after 2017. The BBA
repealed the TEFRA partnership audit
rules and established the new centralized
partnership audit regime. Certain
partnerships may elect to have the new
centralized partnership audit regime apply
to a return filed for an eligible tax year
when filing an AAR under section 6227 (as
amended by BBA). An eligible tax year is
any tax period beginning after November
2, 2015, and before January 1, 2018. A
partnership may not make this election
where:
An AAR has been filed on behalf of a
TEFRA partnership under section 6227(c)
(prior to amendment by BBA), or
An amended return of a nonTEFRA
partnership has been filed.
See Temporary Regulations section
301.9100-22T(c)(4).

An AAR filed for an eligible tax year
before January 1, 2018, will be treated as
an AAR filed on behalf of a TEFRA
partnership or as an amended return filed
on behalf of a nonTEFRA partnership, as
applicable. An AAR filed after January 1,
2018, for an eligible tax year, without a
statement attached to the AAR on which
the partnership makes the election into the
centralized partnership audit regime, will
be treated as an AAR filed on behalf of a
TEFRA partnership or as an amended
return filed on behalf of a nonTEFRA
partnership, as applicable. An AAR filed
with respect to a 2018 short tax period
return by a partnership that is subject to
the centralized partnership audit regime
must meet the requirements under section
6227 (as amended by BBA).
The election cannot be made in this
manner before January 1, 2018. Once
made, an election may only be revoked
with the consent of the IRS.
Making the election. To make the
election, the partnership must write across
the top of the Form 1065X used to file the
Instructions for Form 1065X

AAR, “Election under Section 1101(g)(4)”
and attach a statement to the AAR with
the following information.
The partnership's name, taxpayer
identification number (TIN), and the
partnership tax year for which the election
is being made.
The name, TIN, address, and daytime
telephone number of the individual who
signs the statement.
Language indicating that the
partnership is electing application of
section 1101(c) of BBA for the partnership
return for the eligible tax year.
The information required to properly
designate the partnership representative
as defined by section 6223 (as amended
by BBA), which must include the name,
TIN, address, and daytime telephone
number of the partnership representative.
See Partnership Representative in the
Form 1065 instructions.
The following representations must
be made on the statement.
The partnership is not insolvent and
does not reasonably anticipate becoming
insolvent before resolution of any
adjustment with respect to the partnership
tax year for which the election is being
made.
The partnership has not filed, and does
not reasonably anticipate filing, voluntarily
a petition for relief under title 11 of the
United States Code.
The partnership is not subject to, and
does not reasonably anticipate becoming
subject to, an involuntary petition for relief
under title 11 of the United States Code.
The partnership has sufficient assets,
and reasonably anticipates having
sufficient assets, to pay a potential
imputed underpayment with respect to the
partnership tax year that may be
determined under subchapter C of
chapter 63 of the Internal Revenue Code
as amended by BBA.
A representation, signed under
penalties of perjury, that the individual
signing the statement is duly authorized to
make the election described in Temporary
Regulations section 301.9100-22T and
that, to the best of the individual's
knowledge and belief, all of the
information contained in the statement is
true, correct, and complete.
The statement must be signed and
dated by the TMP, as defined under
section 6231(a)(7) (prior to amendment by
BBA), and the applicable regulations, or
an individual who has the authority to sign
the partnership return for the tax year. The
fact that an individual dates and signs the
statement making the election shall be
prima facie evidence that the individual is
authorized to make the election on behalf
of the partnership.

-3-

Specific Instructions
Name and Address

Print or type the legal name of the entity,
address, and EIN on the appropriate lines.
Include the suite, room, or other unit
number after the street address. If the
Post Office does not deliver mail to the
street address and the entity has a P.O.
box, show the box number instead.
If the entity receives its mail in care of a
third party (such as an accountant or
attorney), enter on the street address line
“C/O” followed by the third party's name
and street address or P.O. box.
If the entity's address is outside the
United States, or its possessions or
territories, enter the information on the line
for “City or town, state, and ZIP code” in
the following order: city, province or state,
and foreign country. Follow the foreign
country's practice in placing the postal
code in the address. Do not abbreviate the
country name.

Item A

If the answer to item A is “Yes,” the
partnership return is not subject to the
TEFRA proceedings. You should proceed
to item E and check the “Not subject to
TEFRA” box.

Items B Through E

These items are used to determine if the
partnership is subject to the rules for
consolidated audit procedures (TEFRA
procedures).

Consolidated REMIC proceedings.
Generally, the tax treatment of REMIC
items is determined at the REMIC level in
a consolidated REMIC proceeding, rather
than in separate proceedings with
individual residual interest holders. A
REMIC subject to consolidated REMIC
procedures will have checked the box on
item G on page 3 of its original Form 1066.

Items B and C

All partnerships (except ELPs) and
REMICs ARE subject to TEFRA
partnership audit procedures unless the
partnership or REMIC is subject to the
small partnership exception. See section
6231(a)(1)(B).
A small partnership is a partnership
with 10 or fewer partners at all times
during the year. All partners must be U.S.
individuals and their estates, resident alien
individuals, or C corporations. If both
these conditions are met, check the “Yes”
box for item B and item C.
Note. For making the small partnership
determination, a husband and wife each
having their own partnership interest are
considered one partner. An individual who
has passed away during the year and their
estate are considered one partner.

Item D

A partnership defined as a small
partnership can elect to be treated as a
TEFRA partnership for tax years
beginning before 2018. The partnership
elects TEFRA treatment by attaching a
statement to the tax return for the first year
they wish the election to be effective. This
statement must be signed by all partners.
See Regulations section 301.6231(a)
(1)-1(b). Form 8893, Election of
Partnership Level Tax Treatment, is the
statement that can be used to make this
election. If you answer “Yes” to item D,
also enter the tax year of the filing of this
election in the space provided.

Item E

If, at any time during the tax year, there
are more than 10 partners or any of the
following are partners in the partnership,
then the partnership is not a small
partnership.
Another partnership.
An LLC which files as a partnership or
is treated as a disregarded entity.
Any type of trust, including a grantor
trust.
A nominee.
A nonresident alien.
An S corporation.
If in item...

The box
checked
is...

Then in item E,
check...

B

No

Subject to TEFRA

C

No

Subject to TEFRA

D

Yes

Subject to TEFRA

B and C

Yes

Not subject to TEFRA

D

No

Not subject to TEFRA

Item F

Check the box to indicate whether you are
filing an amended return or an AAR.

Amended return. Check this box if you
checked the “Not subject to TEFRA” box
in item E, and you are not an ELP. This
means that you are filing a request to
correct a previously filed nonTEFRA
partnership return or REMIC return.
If your partnership or REMIC return
meets the exception under section
860F(e) or section 6231, and does not file
an election to be treated as a TEFRA
partnership under section 6231(a)(1)(B)
(ii), and you received a corrected Form
1099 or are making changes to income,
deductions, or credits, but there are no
flow-through changes from a TEFRA
partnership, then you are filing an
amended return. Check the “Amended
Return” box.
Administrative Adjustment Request
(AAR). Check this box if you are filing a

request to correct a previously filed
partnership or REMIC return and you are
one of the following.
The TMP of the TEFRA partnership or
REMIC. The REMIC must be subject to
consolidated REMIC proceedings. For
more information on consolidated REMIC
proceedings, see the Instructions for Form
1066.
An ELP correcting a previously filed
return.

Item G

A substituted return is an amended return
in which the TMP requests that the
treatment of an item shown on the AAR be
substituted for the treatment of the item on
the pass-through entity's return. If the IRS
allows substituted return treatment, the
changes shown on the amended return
will be treated as corrections of
mathematical or clerical errors, and the
IRS may credit or refund any overpayment
of tax to the partners or residual interest
holders based on the amended return or
assess any resulting tax without a
deficiency or entity level proceeding. See
section 6227(c)(1).
If the request is not treated as a
substituted return, the IRS may credit or
refund any overpayment of tax to the
partners or residual interest holders per
the request, conduct an examination of the
pass-through entity's return, or take no
action on the request. When a request is
not treated as a substituted return, the IRS
cannot assess tax without a deficiency or
entity level proceeding. See section
6227(c)(2).

ELPs. An ELP cannot request substituted
treatment. See section 6251(b).

Part I—Amended or
Administrative Adjustment
Request (AAR) Items for
Partnerships Filing Form
1065 Only
For information on income, deductions,
credits, etc., see the instructions for Form
1065, Schedules K and K-1, for the tax
year being amended or otherwise
adjusted. See the Instructions for Form
1065 for a list of forms that may be
required.

If you are a TEFRA partnership, the
IRS will process Form 1065X following the
guidelines set forth in sections 6227(c)(1)
and 6227(c)(2).
Column (a). Enter the amounts from
Schedule K of Form 1065 as originally
filed or as was previously adjusted. If the
return was changed or audited by the IRS,
enter the amounts as adjusted.
Column (b). Enter the net increase or
decrease for each line being changed.
Use parentheses around all amounts that
-4-

are decreases. Explain the increase or
decrease in Part III.
Line 3. Use line 3 to show amendments
to other net rental income (loss). For more
information on how other net rental
income (loss) is calculated, see Line 3.
Other Net Rental Income (Loss) in the
Instructions for Form 1065 for the tax year
being amended or otherwise adjusted.
If the partnership is reporting more than
one rental activity, show the separate
calculation for each activity in Part III.
Line 9c. For more information on the
three types of unrecaptured section 1250
gain that can be reported, see Line 9c.
Unrecaptured Section 1250 Gain in the
Instructions for Form 1065 for the tax year
being amended or otherwise adjusted.
If the partnership is reporting more than
one type of unrecaptured section 1250
gain, show the separate calculation for
each gain in Part III.
Line 11. Enter any other item of income
or loss not included in lines 1 through 10.
For information on the types of income
and loss reported, see Line 11. Other
Income (Loss) in the Instructions for Form
1065 for the tax year being amended or
otherwise adjusted.
In Part III, identify the different types
and amounts of income and loss reported
on this line.
Line 13d. Enter deductions not included
on lines 12, 13a, 13b, 13c, and 16l. For
more information on the types of
deductions reported, see Line 13d. Other
Deductions in the Instructions for Form
1065 for the tax year being amended or
otherwise adjusted.
In Part III, identify the different types
and amounts of the deductions reported
on this line.
Line 15d. Enter credits (other than credits
reported on lines 15a through 15c) related
to rental real estate activities. These
credits may include any type of credit
listed in Line 15f. Other Credits of the
Instructions for Form 1065 for the tax year
being amended or otherwise adjusted.
In Part III, identify the different types
and amounts of the rental real estate
credits reported on this line.
Line 15e. Enter credits (other than credits
reported on lines 15a through 15d) related
to rental activities. These credits may
include any type of credit listed in Line 15f.
Other Credits of the Instructions for Form
1065 for the tax year being amended or
otherwise adjusted.
In Part III, identify the different types
and amounts of the rental credits reported
on this line.
Line 15f. Enter credits, except for credits
or expenditures shown or listed for lines
Instructions for Form 1065X

15a through 15e. If any of the credits are
attributable to rental activities, enter them
on line 15d or line 15e, as appropriate. For
more information on the types of credits
listed, see Line 15f. Other Credits in the
Instructions for Form 1065 for the tax year
being amended or otherwise adjusted.
In Part III, identify the different types
and amounts of credits reported on this
line. If any of the credits are subject to
recapture, include in Part III the credit
recapture information.
Line 16m. Use line 16m to show
amendments to total reduction in taxes
available for credit. For more information
about the reduction in taxes that are
reported, see Line 16m. Reduction in
Taxes Available for Credit (Code N) in the
Instructions for Form 1065 for the tax year
being amended or otherwise adjusted.
In Part III, identify the different types
and amounts of reductions reported on
this line.
Line 16n. Use Part III to report
amendments to other foreign tax
information. For more information about
the other foreign tax information
associated with this line, see Line 16n.
Other Foreign Tax Information in the
Instructions for Form 1065 for the tax year
being amended or otherwise adjusted.
Line 17f. Use line 17f to show
amendments to other alternative minimum
tax (AMT) items that are not shown on
lines 17a through 17e. For more
information about the other AMT items
associated with this line, see Line 17f.
Other AMT Items in the Instructions for
Form 1065 for the tax year being
amended or otherwise adjusted.
In Part III, identify the different types
and amounts of other AMT items reported
on this line.
Line 20c. Use Part III to report
amendments to other items and amounts.
For more information on other items and
amounts associated with this line, see
Line 20c. Other Items and Amounts in the
Instructions for Form 1065 for the tax year
being amended or otherwise adjusted.

Amended Schedules K-1

File amended Schedules K-1 with Form
1065X and furnish copies of the amended
Schedules K-1 to the partners. If the
partnership is filing Form 1065X for an
AAR, inform the partners receiving the
amended Schedules K-1 that the
partnership is filing the AAR. If the
partnership is not subject to the rules for
consolidated audit proceedings (TEFRA
proceedings) under sections 6221 through
6234, it must furnish the amended
Schedules K-1 to its partners. The
partners must then file their own amended
returns.
Instructions for Form 1065X

Part II—Amended or
Administrative Adjustment
Request (AAR) Items for
ELPs, REMICs, and BBA
Only
ELPs only. An ELP may file an AAR to
adjust its partnership items. Generally, the
ELP has two choices for handling the
adjustment.
1. It may combine the adjustment with
the same partnership item for the year in
which the IRS allows the adjustment and
pass it through to the current partners for
that year. However, if the adjustment
involves the reduction in a credit which
exceeds the amount of that credit for the
partnership tax year in which the
adjustment is allowed, the partnership
must pay tax in an amount equal to the
excess amount.
2. It may elect not to pass the
adjustment through to current partners by
paying tax on any imputed underpayment
that results from the adjustment. If the
partnership elects to pay the tax, enter it
on Part II, line 16. Attach a computation of
the tax to Form 1065X.
In either case, the partnership is liable
for any interest and penalties on imputed
underpayments that result from the
adjustment. See section 6242(b) for
details. Interest is figured on the imputed
underpayment for the period beginning on
the day after the due date (excluding
extensions) of the partnership return for
the tax year the adjustment takes effect,
or, if earlier, the date the partnership paid
the tax due under (2) above. The adjusted
year is the partnership tax year in which
the item being adjusted arose.
ELPs and REMICs. Identify in Part II of
Form 1065X the amount and treatment of
any item the partnership or REMIC is
changing from the way it was reported on
the original return.
Column (a). Enter a description of the
item that the partnership or REMIC is
adjusting or amending.
Column (b). Enter the amounts from the
ELP's or REMIC's return as originally filed
or as it was later adjusted. If the return
was changed or audited by the IRS, enter
the amounts as adjusted.
Column (c). Enter the net increase or net
decrease for each line being changed.
Use parentheses around all amounts that
are decreases. Explain the increase or
decrease in Part III.
Column (d). Add the increase in column
(c) to the amount in column (b) or subtract
the column (c) decrease from column (b).
Enter the result in column (d).

-5-

Line 6. Show any increase or decrease to
the ELP's tax or other payments.
Line 10. Enter total tax as follows.
ELPs. Enter the line 6 amounts on
line 10.
REMICs. Add the amounts on lines 7
through 9 and enter the total for each
column on line 10.
Line 11. Enter the amount of tax
deposited with Form 7004, Application for
Automatic Extension of Time To File
Certain Business Income Tax, Information,
and Other Returns.
Line 14. Enter the amount from the
“Overpayment” line of the original return,
even if the ELP or REMIC chose to credit
all or part of this amount to the next year's
estimated tax. This amount must be
considered in preparing Form 1065X
because any refund due from the original
return will be refunded separately from
any additional refund claimed on Form
1065X. If the original return was changed
by the IRS and the result was an
additional overpayment of tax, also
include that amount on line 14.
Line 16. If the ELP or REMIC does not
use electronic fund transfers, including the
Electronic Federal Tax Payment System
(EFTPS), enclose a check with this form.
Make the check payable to “United States
Treasury.”
Line 17. If the ELP or REMIC is entitled to
a refund larger than the amount claimed
on the original return, line 17 will show
only the additional amount of
overpayment. This additional amount will
be refunded separately from the amount
claimed on the original return. The IRS will
figure any interest due and include it in the
refund.

Amended Schedules K-1 or
Schedules Q

If the ELP or REMIC is filing Form 1065X
for an AAR, do not furnish the amended
Schedules K-1 or Schedules Q to the
partners or residual interest holders. If the
REMIC is not filing for an AAR and is not
subject to the rules for consolidated audit
proceedings under sections 6221 through
6231, the REMIC must furnish the
amended Schedules Q to its residual
interest holders.

AAR With Election into the
Centralized Partnership Audit
Regime Under BBA

Partnerships filing an AAR with an election
into the centralized partnership audit
regime under BBA will need to determine
if the partnership's adjustment as defined
by section 6241(2) (as amended by BBA)
results in an imputed underpayment as
described in section 6225(b) (as amended

by BBA). See section 6225(c) (as
amended by BBA), excluding paragraphs
(2), (7), and (8), for guidance regarding
the modification rules that may apply to an
imputed underpayment. If modification is
applied to an imputed underpayment, the
AAR must include detailed documentation
to support all modifications made to the
imputed underpayment. If the partnership
adjustment results in an imputed
underpayment and the partnership did not
elect to have its partners take the
adjustments into account in lieu of it
paying the imputed underpayment, the
partnership must report and pay the
imputed underpayment and any interest
and penalty associated with the imputed
underpayment. See section 6233 (as
amended by BBA) for information
regarding interest and penalties
associated with an imputed
underpayment. If modification did not
apply to the imputed underpayment, the
imputed underpayment will be figured
using the highest rate in effect under
section 1 or 11 for the tax year to which
the adjustment relates.
Enter the imputed underpayment,
interest, and penalty, if applicable, on
line 10. On the dotted line to the left of the
entry space, enter “BBA Imputed
Underpayment.” If the imputed
underpayment includes interest and
penalty, notate the portion that is imputed
underpayment, interest, and penalty at the
bottom of the page.
If the partnership adjustment did not
result in an imputed underpayment or if
the partnership elects the alternative to
payment of the imputed underpayment,
see section 6226 (as amended by BBA)

(but without regard to subsection (c)(2)(C)
thereof) for information on how the
adjustment is taken into account by its
partners. If the partners are to take the
adjustments into account, the partnership
will be required to furnish to each partner
of the partnership for the tax year of the
BBA AAR and file with the AAR, a
statement of the partner's share of any
adjustment to income, gain, loss,
deduction, or credit indicated by the AAR.
Write "Statement Required to be furnished
by a Partnership electing the Alternative to
Payment of an Imputed Underpayment" at
the top of each statement.
The statement must also include the
following.
Name, correct TIN, and address of the
partnership.
Name and correct TIN of the partner.
Current or last address of the partner
that is known to the partnership.
The partner’s share of the items being
adjusted as originally reported to the
partner.
Date the statement is furnished to the
partner.
The partnership tax year to which the
adjustments relate.

Part III—Explanation of
Changes to Items in Part I
and Part II
For each amended item, explain in detail
the reasons for the change. Include any
computations necessary to support the
amended item.
Changes in allocations. If there is a
change in the allocation of income, gain,
loss, deduction, or credit to a partner,

-6-

check the box in Part III and specify the
nature and reasons for the changes.
Paperwork Reduction Act Notice. We
ask for the information on this form to carry
out the Internal Revenue laws of the
United States. You are required to give us
the information. We need it to ensure that
you are complying with these laws and to
allow us to figure and collect the right
amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records relating
to a form or its instructions must be
retained as long as their contents may
become material in the administration of
any Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section 6103.
The time needed to complete and file
this form will vary depending on individual
circumstances. The estimated burden for
business taxpayers filing this form is
approved under OMB control number
1545-0123 and is included in the
estimates shown in the instructions for
their business income tax return.
If you have suggestions for making this
form simpler, we would be happy to hear
from you. You can send us comments
from IRS.gov/FormComments. Or you can
write to: Internal Revenue Service, Tax
Forms and Publications Division, 1111
Constitution Ave. NW, IR-6526,
Washington, DC 20224. Do not send
Form 1065X to this address. Instead, see
Where To File, earlier, near the beginning
of the instructions

Instructions for Form 1065X