Should partnerships consider an extension when filing their 2022 partnership return?
As a protective measure, the answer is yes.
Partnerships subject to the Bipartisan Budget Act (BBA) rules should consider filing an extension request for their 2022 partnership return, even when timely filing the return. By doing so, will allow partnerships the option of filing a superseding Form 1065 and Schedule K-1 up to the extended due date of the return, if needed, rather than having to rely on an amended return or an administrative adjustment request (AAR) to make changes. A superseding return will also provide the partnership a subsequent opportunity to file missed elections and attachments that might otherwise be treated as late.
The BBA of 2015 changed how partnerships make adjustments to previously filed partnership returns. Partnerships subject to the BBA centralized partnership audit rules ordinarily must submit an AAR to revise a previous tax return. An AAR is a more complex and time-consuming process than the previous method of filing an amended return.
Superseding Existing Returns
To circumvent the need to make changes to the current year partnership tax return under the BBA rules, partnerships can use the option of superseding the existing return with new information. This is different than an amended return, but rather it is a second return filed before the originally filed return’s due date, including extensions. A superseding return is considered the return of record, as it replaces any other return previously filed within the 2022 filing period.
Windham Brannon is here to help you make the best decisions to help you and your business remain in compliance. For more information about the BBA and its impact to your business, talk to your Windham Brannon advisor, or reach out to Gary Gruner.