The Internal Revenue Service has released guidance to enable partnerships to submit the Schedule K-1 electronically to partners.
Certain entities, such as partnerships, are required annually to file K-1s, showing the partner’s share of current-year income, deductions, credits and other items, with the IRS and provide a copy to their partners. The IRS estimates that partnerships filed nearly 26 million K-1s last year.
The new rules issued Monday by the IRS are intended to make it simpler for partnerships to provide this information to their partners, and reduce the expense associated with printing and mailing K-1s to partners who opt to receive them electronically.
The guidance is contained in Revenue Procedure 2012-17, which provides the rules describing when partnerships are allowed to provide K-1s electronically to partners. The partnership must receive the partner’s consent before providing K-1s electronically, instead of on paper. The new rules are similar to rules already governing the electronic transmission of 1099 and W-2 forms.
The revenue procedure addresses how a partner can provide consent electronically, including through secure email and the partnership’s Web page. The revenue procedure also describes how partners can be informed about changes in software. It also defines how a partnership is supposed to provide instructions about accessing and printing electronic statements, along with the partnership’s responsibility if the K-1 is electronically undeliverable.
Generally speaking, K-1s must be provided to recipients by the due date of Form 1065, U.S. Return of Partnership Income. For partnerships that operate on a calendar-year basis, the due date is April 17, 2012.
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