IRS Notice 2021-39: Transition Period Penalty Relief for New Schedules K-2 and K-3 for Forms 1065, 1120-S and 8865
Provides PENALTY RELIEF for taxable years that begin in 2021 (processing year 2022) with respect to Schedules K-2 and K-3 to Forms 1065, 1120-S, and 8865. These forms that will be made available in late February 2022 to software developers, by the IRS, to incorporate into their software and are required to be included in Business returns that must be filed by March 15, 2022. During this transition period, a partnership required to file Form 1065, an S corporation required to file Form 1120-S, or a U.S. partner required to file Form 8865 (a “Schedule K-2/K-3 filer”) will not be subject to the relevant penalties for any incorrect or incomplete reporting on the Schedules K-2 and K-3 if the filer establishes to the satisfaction of the Commissioner that it made a good faith effort to comply with the Schedules K-2 and K-3 filing requirements.
To read the full IRS documentation regarding the IRS transition penalty relief, click here.
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