Amended return or AAR: which a partnership can file

The rule: IRC 6031(b)

IRC 6031(b) requires partnerships to furnish Schedules K-1 by the return due date and then says: “Information required to be furnished by the partnership under this subsection may not be amended after the due date of the return under subsection (a) to which such information relates”, except for a partnership that elected out under IRC 6221(b), under the modification procedures of IRC 6225(c), for push-out statements under IRC 6226, or as otherwise provided by the IRS. The Form 1065-X instructions translate that into practice: “To make adjustments to partnership-related items, partnerships under BBA must file an AAR instead of an amended return unless there is specific guidance allowing for the filing of an amended return.”

Rev. Proc. 2025-28 restates the same limit, noting that IRC 6031(b) generally prohibits BBA partnerships from amending the information furnished to partners after the due date and that they may instead file an AAR under IRC 6227.

Which filing fits which situation

Form 1065-X cannot be used to elect out of BBA: “Form 1065-X isn’t used to elect out of BBA.” An election out can only be made on a timely original return (see electing out). The IRS's AAR page adds that “An AAR may be filed only after an original return is filed for the tax year.”

Superseding returns before the due date

A return filed before the due date, including extensions, can be replaced by a superseding return filed by that date. Rev. Proc. 2025-28 describes the practice for partnerships: a partnership that files Form 1065 and furnishes Schedules K-1 before the due date (including extensions) may file a superseding Form 1065 and furnish corresponding Schedules K-1 before the extended due date, citing Rev. Proc. 2019-32. That revenue procedure also granted an automatic six-month extension to file a superseding 2024 return for taxpayers making certain elections under the domestic research expenditure provisions enacted in 2025.

A superseding return is treated as the original return. That has consequences under BBA: “If a partnership files a return before the filing due date without an election out of BBA and subsequently files a superseding return on or before the due date that includes an election out of BBA, the election on the superseding return is valid, provided all other requirements under IRC 6221(b) are met.” (IRM 4.31.9.3). The same logic applies when an entity files a Form 1065 in error and then files the correct return by the due date (IRM 4.31.9.7.3.1). After the due date, a second filing is an amended return or AAR, not a superseding return.

Guidance allowing BBA amended returns

The IRS has used its authority under IRC 6031(b)(4) sparingly. Rev. Proc. 2020-23, issued after the CARES Act, allowed eligible BBA partnerships to amend 2018 and 2019 returns: “BBA partnerships that filed a Form 1065 and furnished all required Schedules K-1 for the taxable years beginning in 2018 or 2019 prior to the issuance of this revenue procedure may file amended partnership returns and furnish corresponding Schedules K-1 before September 30, 2020.” The amended return had to be marked “FILED PURSUANT TO REV PROC 2020-23”, and a partnership under exam had to notify its revenue agent. IRM 4.31.9.1.7 lists guidance for examiners reviewing returns amended under Rev. Proc. 2020-23 and Rev. Proc. 2021-29.

Current guidance can also permit an election on an AAR. Rev. Proc. 2025-28 provides that the small business election to apply new section 174A retroactively may be made on a timely original return or on an AAR or amended return, as applicable, by attaching the required statement. Check the specific guidance before assuming an amended return is available.

How the AAR differs from an amended return

An amended return corrects the reviewed year directly and lets partners amend their own reviewed-year returns. An AAR does not. Under IRC 6227(b), the adjustments are taken into account in the year the AAR is filed: the partnership pays an IU computed under the BBA rules, or pushes out, and in either case adjustments that do not result in an IU go to reviewed-year partners on Forms 8986, who report them on Form 8978 for the reporting year. The IRS's AAR page instructs: “The partnership should not provide amended Schedules K-1 or K-3 with an AAR.”

Other differences: only the PR or DI signs; the AAR must include an IU computation even when the IU is zero or less; the AAR extends the IRS's adjustment period to three years after filing; and the AAR becomes the starting point for any exam. Details are on administrative adjustment requests and Form 8082.

Amended returns for elected-out and pre-2018 partnerships

A partnership that validly elected out for the year is a non-BBA partnership. The Form 1065-X instructions say a non-BBA partnership filing electronically amends with Form 1065, and otherwise uses Form 1065-X; any partner or LLC member signs a non-BBA amended return, and it is not a return unless signed. The same three-year timing generally applies: within three years after the later of filing or the original due date. Amended K-1s go to partners, who file their own amended returns if needed. For pre-2018 small partnerships not under TEFRA, the same partner-level approach applies. TEFRA partnerships followed a separate AAR process in which partners could also file AARs (IRM 8.19.14.3.1; IRM 4.31.4).

The Form 1065-X instructions also cover a third use: a partnership-partner filing a modification amended return in an audited BBA partnership's modification proceeding, within the time allowed under IRC 6225(c). See modification requests.

What partners can do on their own

A partner in a BBA partnership must report consistently with the partnership return under IRC 6222(a), or file Form 8082 to identify the inconsistency. Without notice, an inconsistent position is assessed like a math error. With notice, the IRS must use deficiency procedures, but only for the items identified: “The partner is protected only to the extent of the items identified as being treated inconsistently.” (IRM 4.31.9.8.2.4). A partner who believes the partnership reported an item wrongly, or who never received a K-1, uses Form 8082 with its own return; a partner cannot file an AAR for the partnership unless it is the PR.

The notice route is not available for audit results: “A partner is bound to finally determined adjustments on Form 8986 resulting from a BBA partnership audit and may not use Form 8082 to report the items differently.” (Form 8082 instructions). After a NAP, partners also cannot file Form 8082 to report items from that partnership year inconsistently.

During an exam

Once the NAP is mailed, a BBA partnership cannot file an AAR for that year, and the examiner refers any subsequent filing to a BBA point of contact to decide whether it is a valid AAR (IRM 4.31.9.7.7). LB&I partnerships can submit informal claims within 30 days of the opening conference. BBA Operations' technical assistance request procedures list amended returns of BBA partnerships for 2018 and 2019 under Rev. Proc. 2020-23 among the account issues its closing team may process (IRM 4.31.13.12.6). See the BBA exam process and, for non-partnership filers, amended returns and claims during an exam.

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