IRS Asks for Comments on Partnership Form Reporting Requirements

The IRS is seeking input on methods of reporting partners’ investments in entities as the agency crafts guidance on new partnership form disclosure rules, according to a new notice.

Notice 2020-43 states that officials want comments on a requirement that partnership return preparers report partners’ shares of capital using a method that can help the Internal Revenue Service spot certain abusive accounting schemes.

• In February 2019, the IRS released new partnership form instructions mandating that the entities disclose negative capital account balances—essentially the money partners would get in the event the partnership was liquidated.
• In December, the agency issued ...