My accountant told me that after attending a very recent tax
seminar, he was told that investment clubs with 25 or less
members no longer have to submit a club tax return (1065) to
the IRS, even though the club might be a partnership. Of
course, each member must accurately report income on their
individual tax returns. Not submitting 1065's was surprising
to him and to me. Has anyone else heard this?

There is nothing on the IRS website (public or practitioner areas) nor on any of the other tax-related sites that I regularly follow to indicate that the IRS has adopted this. In fact, everything the IRS has done recently argues against such a decision. The revision of Schedule K-1 a few years ago and the upcoming revisions to Form 1065 (2008) are intended to make automated compliance tracking easier. Therefore there will be greater emphasis on filing, not less. I would ask your accountant to go back to his seminar instructor and get a citation for this claim.

 

Ira Smilovitz