IRS Backs Off Requirement for Much-Criticized Partnership Forms

In response to vocal feedback from tax practitioners, the IRS announced Tuesday that certain qualifying domestic partnerships and S corporations won’t have to meet new reporting requirements for 2021. The agency said more details are forthcoming.

• The agency said “certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance” will not have to file the new Schedules K-2 and K-3.
• Practitioners have criticized new rules requiring partnerships to classify their foreign income by type and source as being a huge new ...