BBA administrative adjustment request checklist
Partnership: [Name] EIN: [EIN] Reviewed year: [Tax year] Prepared by: [Name]
1. Can the partnership file?
- Partnership is a BBA partnership for the reviewed year (no valid election out under IRC 6221(b)).
- Original return for the reviewed year was filed on [date].
- AAR deadline: 3 years after the later of [filing date] or [original due date] = [deadline]. [Check any Form 872-type extension under IRC 6235]
- No notice of administrative proceeding received for the reviewed year.
- AAR is not being filed solely to designate or change the partnership representative.
2. Partnership representative
- PR for the reviewed year: [Name]; designated individual (if PR is an entity): [Name].
- If no PR designation is in effect or a change is wanted: Form 8979 attached (Form 8082 item A).
- PR or DI available to sign under penalties of perjury on [date].
3. Adjustments and imputed underpayment
- Adjustments to partnership-related items listed (Form 8082 Part II; explanation in Part III).
- Schedule supporting each position attached.
- Imputed underpayment computed (grouping, subgrouping, netting) and shown, even if zero or less. Result: [IU amount].
- If IU is greater than zero, decision made: [pay the IU / elect push-out under IRC 6227(b)(2)] (item C1).
- If paying and modifying: Form 8980 attached with support for each modification (item E).
4. Partner statements [Required if push-out elected or any adjustment does not result in an IU]
- Form 8986 prepared for each reviewed year partner (no amended Schedules K-1 or K-3).
- Form 8985 transmittal prepared.
- Partner names, TINs and current or last known addresses verified.
- Forms 8986 to be furnished to partners on the same date the AAR is filed: [date].
- PR signs Form 8082 item D attesting statements were furnished.
5. Filing package
- E-filed: Form 1065 with box G(5) checked, Form 8082 as an attached PDF, Forms 8985 and 8986, signed item D page as PDF.
- Paper: Form 1065-X with BBA AAR box checked, Forms 8985 and 8986.
- Copies of previously filed forms used as support marked with the copy-only legend in the instructions.
- Form 8302 attached if requesting an electronically deposited refund of $1 million or more.
6. Payment [If IU paid]
- IU paid with the AAR: [EFTPS, payment type 'BBA AAR Imputed Underpayment' / check payable to 'United States Treasury' with partnership name, 'Form 1065,' EIN, tax year and 'BBA AAR Imputed Underpayment'].
- Entity-level amounts the partnership owes even with a push-out paid.
7. After filing
- Partners told that Form 8986 is reported on Form 8978 (or pushed further by pass-through partners by the date in Form 8986, Part II, item F).
- File retained, including proof of the date Forms 8986 were furnished.
When an AAR is the right tool
The IRS AAR page says BBA partnerships “must file an administrative adjustment request (AAR) instead of an amended return” to correct partnership-related items. That covers partnerships that did not elect out for tax years beginning after 2017. A partnership that validly elected out under IRC 6221(b) amends normally. The differences are covered at amended returns vs. AAR and the full procedure at administrative adjustment requests.
Timing and who signs
Treas. Reg. 301.6227-1(b): “A partnership may not file an AAR with respect to a partnership taxable year more than three years after the later of the date the partnership return for such partnership taxable year was filed or the last day for filing such partnership return (determined without regard to extensions).” The same paragraph bars an AAR after a notice of administrative proceeding is mailed, except as provided in 301.6231-1(f), and the IRS page gives a foreign tax redetermination as an example. The Form 8082 instructions note special rules where the period has been extended under IRC 6235; see BBA statute of limitations.
The IRS page: “Only the reviewed year partnership representative (PR) or designated individual (DI), if the PR is an entity, can file and sign an AAR on behalf of the partnership.” If no PR designation is in effect, attach Form 8979; a designation filed with the AAR is effective on the date the AAR is filed. But the Form 8082 instructions are equally clear: “If you’re a BBA partnership, you may not file an AAR solely for the purpose of changing the PR.” See partnership representative and Form 8979.
The imputed underpayment decision
Under 301.6227-1(a), the partnership must determine whether the adjustments produce an imputed underpayment. The Form 8082 instructions add: “An IU calculation must always be made and presented on the AAR.” That applies even when the result is zero or negative.
| IU result | What the partnership does | Forms |
|---|---|---|
| Greater than zero, partnership pays | Pays the IU with the AAR; may request modifications; pushes out any adjustments that do not result in an IU | Form 8980 if modifying; 8985 and 8986 for non-IU adjustments |
| Greater than zero, push-out elected | Elects under IRC 6227(b)(2); partners take adjustments into account; modifications are disregarded | Forms 8985 and 8986; item C1 “Yes” |
| Zero or less | Pushes out all adjustments to reviewed year partners | Forms 8985 and 8986; item C2 |
An invalid push-out election leaves the partnership liable for the IU. Even with a valid election, the partnership must still pay entity-level amounts, which the instructions say “should not be pushed out to partners but paid by the partnership.” Use the imputed underpayment estimator for a first pass and see imputed underpayment and modification requests.
Partner statements
Partners learn their share through Form 8986, not amended K-1s. The IRS page: “The partnership should not provide amended Schedules K-1 or K-3 with an AAR.” Each statement must include the partner’s name, TIN and current or last known address, the partner’s share of items as originally reported and of the adjustments, the date furnished and the reviewed year (Reg. 301.6227-1(e)). Timing is fixed: “The statement must be furnished to the reviewed year partner on the date the AAR is filed with the IRS.” The PR signs item D of Form 8082 attesting that the statements were provided. See Forms 8985 and 8986.
How to file and pay
- E-filed returns: Form 8082, plus Form 1065 with box G(5) “Amended return” checked for transmission, plus Forms 8985 and 8986 when required. The instructions say “Form 8082 should be attached as a PDF to Form 1065.” The PR’s manually signed item D page goes in as a PDF attachment.
- Paper returns: Form 1065-X with the BBA AAR box checked, plus Forms 8985 and 8986 when required.
- Attachments: a schedule supporting each position; Form 8980 if modifying a paid IU; Form 8979 if designating a PR; Form 8302 for an electronically deposited refund of $1 million or more.
- Payment: the IU is due when the AAR is filed and is shown on Form 1065, page 1, line 26. Pay through EFTPS or card using the “BBA AAR Imputed Underpayment” payment type (Direct Pay is not available), or by check payable to United States Treasury with the partnership name, Form 1065, EIN, tax year and “BBA AAR Imputed Underpayment.”
Mistakes
- Sending amended K-1s to partners instead of Forms 8986.
- Omitting the IU computation because the result is zero.
- Filing after a notice of administrative proceeding.
- A partner, rather than the PR or DI, signing the AAR.
- Furnishing Forms 8986 days after the AAR is filed rather than on the filing date.
- Expecting the AAR to close the year. Under Reg. 301.6227-1(f) the IRS can still open an examination of the year and re-determine the IU the partnership computed.
Questions practitioners ask
Can an AAR request a refund?
Adjustments that do not result in an IU are pushed out to the reviewed year partners, who take them into account on Form 8978 in the reporting year (or push them further, for pass-through partners).
What do partners do with Form 8986 from an AAR?
Individuals and C corporations report it on Form 8978 with the reporting year return. Pass-through partners either pay an IU or push the adjustments further by the date in Form 8986, Part II, item F.
Can the partnership change its PR with an AAR?
Yes, by attaching Form 8979, but not as the only purpose of the AAR.
Is there a separate AAR for partners?
A partner may not file an AAR on behalf of the partnership unless it is the PR or DI. A partner of a BBA partnership that has received a notice of administrative proceeding cannot file a Form 8082 for inconsistent treatment of that partnership’s items.
Does the push-out election on an AAR use Form 8988?
No. Form 8988 is for the push-out after a final partnership adjustment in an exam. On an AAR the election is made on Form 8082 item C1 or Form 1065-X. See the push-out checklist.