To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Gail Brilling on
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Alessandro Squeo on
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
sbaskar@aol.com on
Agree, we need to clarify.
Baskar
Treasurer
Selvam Investment Club
On Friday, February 25, 2022, 11:02:56 AM CST, Alessandro Squeo via bivio.com <user*8340400001@bivio.com> wrote:
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Scott Reina on
Isn't there an exemption from filing K2 and K3s this year? Look at the below FAQ item 15. As long as there aren't any foreign individuals, partners, etc
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Lucile Sorrells on
So so if we file an extension then what? Do we have to do anything when we get ready to file for real?
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Michele on
Shouldn't club members be advised if the amount to be reported on their K-1 is material?
What about clubs that don't have foreign investments? Why should their returns be held up?
Michele Grinoch
On Friday, February 25, 2022, 02:51:47 PM EST, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
ira smilovitz on
The information in Schedule K-3 may be needed by a club member who has foreign investments outside of the club. The club doesn't (and can't) know whether this is the case. The IRS can assess a penalty of $280 for each K-3 that is not provided to a partner when it should have been.
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Dave & Betsy Rowekamp on
I don't understand. Why is club partnership responsible for supplying a K-3 form to a partner who holds foreign investments totally outside the partnership if the partnership itself does not need to generate a K-3?
Dave Rowekamp
Roundtable Investment Club
Sent from my iPhone
On Feb 25, 2022, at 18:06, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:

The information in Schedule K-3 may be needed by a club member who has foreign investments outside of the club. The club doesn't (and can't) know whether this is the case. The IRS can assess a penalty of $280 for each K-3 that is not provided to a partner when it should have been.
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
ira smilovitz on
The law, as written, says that all partnerships must file the forms unless they know for certain that the information shown on the forms is not needed by any partner. I realize most of you have not seen the forms yet, but they report information in a different format from Schedule K-1, even if there is no foreign activity.
I don't understand. Why is club partnership responsible for supplying a K-3 form to a partner who holds foreign investments totally outside the partnership if the partnership itself does not need to generate a K-3?
The information in Schedule K-3 may be needed by a club member who has foreign investments outside of the club. The club doesn't (and can't) know whether this is the case. The IRS can assess a penalty of $280 for each K-3 that is not provided to a partner when it should have been.
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Lucile Sorrells on
I have a question for you. After we file for an extension and then finally Bivio gets the IRS forms ready for us do we have to do anything different ? Just file the regular way. Is ICLUB having the same delay as well? I have not seen anything about it on the BI site.
The law, as written, says that all partnerships must file the forms unless they know for certain that the information shown on the forms is not needed by any partner. I realize most of you have not seen the forms yet, but they report information in a different format from Schedule K-1, even if there is no foreign activity.
I don't understand. Why is club partnership responsible for supplying a K-3 form to a partner who holds foreign investments totally outside the partnership if the partnership itself does not need to generate a K-3?
The information in Schedule K-3 may be needed by a club member who has foreign investments outside of the club. The club doesn't (and can't) know whether this is the case. The IRS can assess a penalty of $280 for each K-3 that is not provided to a partner when it should have been.
What do you need to clarify?? The IRS currently is requiring the submission of two new forms, K-2 & K-3. Bivio is having problems getting the software ready to produce those forms. Those problems are caused by the lack of coordination between our Congressional bodies and the IRS, and not within the control of Bivio.
The smartest thing for you to do is to file an extension for the Club return. If your members talk to their tax advisors, they may or may not decide to file an extension for their personal returns.
The second smartest thing you can do is to send the AICPA letter below to your congressman with your own comments. I mean, the IRS can't get its act together and taxpayers are still on the hook for filing who knows what. If that is not third world bureaucracy, I don't know what is.
Bivio can only advise you so much on tax matters. As far as I am concerned, our fees have not paid for the tax advice we have already gotten.
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Phyllis Wigham on
Please do this. Wading through the 1065 instructions confuses me even more.
Sent from my iPhone
On Feb 25, 2022, at 12:02 PM, Alessandro Squeo via bivio.com <user*8340400001@bivio.com> wrote:
Guys, for the benefit of every club partnership, can we setup a Zoom meeting to go review on what to do and how to do it correctly? Bivio, can you please coordinate and setup an event to clarify this mess?
The IRS.GOV site provides a comprehensive explanation of all K-2 and K-3 aspects including penalties, how to electronically file using PDF copies, and a detailed reason for this new requirement.
To give you an idea of how broad the impact of these changes are -
Dated today the AICPA [American Institute of Certified Public Accountants] sent a letter with their concerns regarding Schedules K-2 and K-3 reporting. The letter was signed by all state CPA societies.
The body of the letter states:
The AICPA and state CPA societies across the country call on the Treasury Department and the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season) and to suspend any assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
The Coronavirus Disease 2019 pandemic (commonly known as "Coronavirus") has created unforeseen difficulties for the Internal Revenue Service (IRS), taxpayers, and tax professionals alike. As the 2021 tax year filing season begins under similar conditions as previous years due to the Coronavirus pandemic, the Department of the Treasury ("Treasury") and the IRS "are under no illusions that it's going to go smoothly."
A streamlined and expanded reporting tool of complex matters through fiscally transparent entities was undeniably necessary and we appreciate the importance of IRS's foreign passthrough reporting requirements. We also acknowledge the substantial efforts of Treasury and the IRS in developing redesigned international tax reporting passthrough forms of Schedules K-2 and K-3 (the "Schedules"), releasing final instructions, and providing certain transition relief for 2021 tax years. Filing complete and accurate returns are essential elements to a well-functioning and voluntary tax system.
However, recent revisions pertaining to the Schedules' filing instructions raise additional questions, perpetuating futility in filing a complete and accurate return and the goal of standardized international reporting. Further modifying the applicable scope of the new Schedules amidst tax filing season leaves the tax system confused and in disarray. The AICPA previously recommended that due to implementation difficulties, such as software development and the Coronavirus pandemic impacting the entirety of the 2020 filing season, a delay until 2023 was necessary.
We continue to urge the IRS to delay implementation of the Schedules K-2 and K-3 to 2023 (the 2022 tax year filing season). If the IRS is not prepared to electronically accept the new Schedules in time for the initial filing dates of these forms, the filing requirement should apply for tax years beginning after the date the IRS and software providers are able to properly provide and process the new schedules in an electronic format. Further, we recommend no assessment of penalties against Partnerships or S Corporations for failing to file or failing to timely provide Schedules K-2 and K-3 for the 2021 tax year.
Delay is essential until e-filings can be accepted and uncertainty regarding taxpayer filing Obligations is resolved. Currently, the IRS is unable to accept electronically filed returns containing the Schedules K-2 or K-3 via the Modernized e-File (MeF) system for partnership returns until March 20, 2022, and for S corporations returns until mid-June. The lack of a timely available MeF filing option for these forms in electronic format will cause unnecessary hardship to all affected parties.
These tentatively planned dates to accept e-filings are past the original due dates for all passthrough returns, which - given the continual changes regarding applicable filing obligations and MeF system unavailability - will presumptively necessitate filing extensions for significantly more partnership, S corporation, and owners' individual income tax returns than in prior years. A major consequence of not having an MeF option is that the IRS will be tasked with processing unnecessary extensions in addition to the paper-filed returns for those entities who choose not to extend. Software providers also cannot offer sufficient solutions until the MeF system is complete.
The 2022 filing season has commenced and the IRS as well as taxpayers are unclear as to who is required to file the Schedules, nor can taxpayers properly file and the IRS process these Schedules. These threshold issues nearly preclude complete and accurate returns for the 2022 filing season on which our tax system relies and on which the Schedules are predicated in the goal to standardize international tax reporting.
Carole L. Jansen on
Was the question ever answered about exemption from filing
the K-2 and K-3 that is set forth in FAQ #15 in the
following link?