Alert: Is Your Partnership Following Guidelines for Furnishing Schedules K-1 Electronically?

By Elizabeth Powell, CPA

With tax season upon us, partnerships should be mindful of the Internal Revenue Service’s guidelines for furnishing Schedules K-1s electronically to their partners. With the issuance of Revenue Procedure 2012-17, the IRS provided their first official guidance on furnishing Schedules K-1s electronically. This guidance was effective February 13, 2012.

A partnership required to furnish Schedules K-1 to partners may furnish the Schedule K-1 in an electronic format in lieu of a paper format provided that the recipient has affirmatively consented to receive it in an electronic format. This consent must be made in a manner that demonstrates that the recipient can access the Schedule K-1 in the electronic format in which it will be furnished.

A Schedule K-1 furnished on a website must be retained on a website for 12 months following the end of the partnership's tax year or six months after the date of issuance of the Schedule K-1, whichever is later. An amended Schedule K-1 must be furnished electronically within 30 calendar days of the date that the Schedule K-1 has been amended if the original was furnished electronically.

If a recipient does not provide consent, or if the consent is withdrawn before the electronic form is furnished, the Schedule K-1 must be provided to the recipient in a paper format. Affirmative consent is not required if the Schedule K-1 is provided in a paper format in addition to the electronic format.

The complete Revenue Procedure 2012-17 may be accessed at http://www.irs.gov/pub/irs-drop/rp-12-17.pdf.

Please contact your Decosimo advisor with any questions you have concerning these rules and their applicability to your partnership.