Push-out election and statement checklist
Partnership: [Name] EIN: [EIN] Reviewed year: [Year]
FPA mailing date: [Date] Form 8988 deadline (45 days): [Date]
Tax Court petition deadline (90 days): [Date] Petition filed: [Yes / No]
A. Decide
- Which imputed underpayment(s) in the FPA the election covers: [All / IU number].
- Partner tax effect modeled versus partnership payment.
- Whether to petition the Tax Court as well (election does not prevent a petition).
B. Form 8988 election (within 45 days of FPA)
- Partnership name, address and TIN.
- Taxable year to which the election relates.
- Copy of the FPA.
- Identification of the imputed underpayment, if the FPA has more than one.
- Name and TIN of each reviewed year partner.
- Current or last known address of each reviewed year partner.
- Signed by the partnership representative [or designated individual].
- Submitted electronically on [date]; confirmation saved.
- IRS response (Letter 5931 and countersigned Form 8988) received on [date].
C. Final determination date
- No petition: 90-day petition period expired on [date].
- Petition: court decision became final on [date].
- Statements due (60 days after the later date): [date].
D. Form 8986 statements (one per reviewed year partner)
- Partner name and TIN.
- Partner's current or last known address.
- Partner's share of items as originally reported.
- Partner's share of the partnership adjustments, allocated as originally allocated (or per the adjustment, for reallocations).
- Modifications approved by the IRS for that partner or its indirect partners.
- Penalties, additions to tax or additional amounts: Code section, rate and related adjustments.
- Date furnished.
- Reviewed year.
E. Furnish and file (by the 60-day date)
- Forms 8986 furnished to each partner; undeliverable statements re-mailed after reasonable diligence to find a correct address.
- Forms 8986 and Form 8985 transmittal filed electronically with the IRS.
- Adjustments on Forms 8986 (Part V) and 8985 (Part IV) reconciled to Form 15027.
- Chapter 3 or 4 withholding on adjustments for foreign partners paid by the required date.
F. Corrections
- Errors found within 60 days of the statement due date: corrected statements furnished and filed.
- Errors found later: IRS consent requested before correcting.
When the push-out applies
Under Treas. Reg. 301.6226-1(a), a partnership may elect an alternative to paying an imputed underpayment determined in a BBA examination, and a partnership that makes a valid election “is no longer liable for the imputed underpayment” to which it applies. The reviewed year partners take their shares into account instead. The FPA package mailed to the partnership and the PR includes Form 8988 (IRM 8.19.14.6.5). The concepts are at push-out election; this page is the filing checklist. For an AAR push-out, which does not use Form 8988, see the AAR checklist.
The Form 8988 election
The deadline is strict: “An election under this section must be filed within 45 days of the date the FPA is mailed by the IRS. The time for filing such an election may not be extended.” The election must be signed by the partnership representative and include the items in 301.6226-1(c)(3)(ii), listed in section B of the checklist. The partner list is the part that takes time, so start it when the FPA arrives, or earlier when an FPA is expected. See Form 8988.
On submission, IRM 4.31.13.11.1 says Form 8988 “must be submitted by the AP within 45 days of issuance of the FPA. Submission is required to be made through the OFSS portal.” The Form 8986 instructions direct audited partnerships to IRS.gov/BBAeSubmit to register for electronic submission.
The election and litigation are not exclusive. Under 301.6226-1(f), “a partnership that makes an election under this section is not precluded from filing a petition under section 6234(a).” Once made, “An election under this section may only be revoked with the consent of the IRS” (Form 8989 is the revocation request). See BBA in Appeals and Tax Court.
The Form 8986 statements
Treas. Reg. 301.6226-2(b) says statements “must be furnished to the reviewed year partners no later than 60 days after the date all of the partnership adjustments to which the statement relates are finally determined.” Final determination is the later of the end of the time to petition under IRC 6234 or, if a petition is filed, the date the court’s decision becomes final. The same 60-day date applies to filing the statements with the IRS electronically with a transmittal (Form 8985).
| Deadline | Measured from | Source |
|---|---|---|
| Form 8988 election | 45 days from FPA mailing | Reg. 301.6226-1(c)(2) |
| Forms 8985 and 8986 (audited partnership) | 60 days after final determination | Reg. 301.6226-2(b), (c) |
| Corrections without consent | Within 60 days of the statement due date | Reg. 301.6226-2(d) |
| Pass-through partners further pushing out | Extended due date of the audited partnership’s adjustment year return (Form 8986, Part II, item F) | Form 8986 instructions |
Each partner’s share follows the original allocation for the reviewed year unless the adjustment itself reallocates an item. Modifications approved for a partner appear on its statement but are disregarded in computing its share (301.6226-2(f)(2)). The Form 8986 instructions warn: “Failure to furnish and submit by the due date may result in the audited partnership being liable for the IU.” Audited partnerships with foreign partners may also owe chapter 3 or 4 withholding. See Forms 8985 and 8986 and tiered partnerships.
How the IRS reviews the package
The BBA unit must “Review and determine if Form 8988 is deemed valid before countersigning within 5 business days”, checking the partner list against IRS records and verifying the PR, DI or POA signature (IRM 4.31.13.11.1). If information is missing, the IRM has the unit reach out to the PR or POA to perfect it; if that fails, the election is rejected by Letter 5931. When the push-out package arrives, the revenue agent checks timeliness and compares the adjustments on Form 15027, Form 8985 Part IV and Forms 8986 Part V. Discrepancies lead to a call for a corrected package and, without one, revocation of the push-out and assessment of the IU (IRM 4.31.13.11.2).
The regulation gives the IRS a lot of room: “The IRS may determine an election to be invalid without first notifying the partnership or providing the partnership an opportunity to correct any failure”. If it does, it notifies the partnership and PR within 30 days, and the partnership owes the IU as if no election had been made. It may not invalidate an election for errors the partnership corrected on time under 301.6226-2(d).
Mistakes that invalidate the election
- Filing Form 8988 on day 46. There is no extension.
- An incomplete or inaccurate partner list (names that do not match TINs).
- Counting the 60 days from the FPA rather than from final determination, or forgetting that a petition moves the date.
- Adjustments on Forms 8986 that do not reconcile to Form 15027.
- Correcting statements more than 60 days after the due date without IRS consent.
Questions practitioners ask
Can the partnership push out only one of several IUs?
Yes. Reg. 301.6226-1(a) allows an election for one or more of the imputed underpayments in the FPA, and the election must identify which one.
What do partners do with the Form 8986?
Partners that are not pass-throughs report the adjustments on Form 8978 with the reporting year return and may prepay to stop interest. Pass-through partners either pay an IU or push out further, by the date in Form 8986, Part II, item F.
Is the partner bound by the statement?
Reg. 301.6226-1(e) says the partner’s share and the applicability of penalties on the statement filed with the IRS are binding on the partner unless the IRS determines otherwise.
Can Appeals get the case before the push-out window closes?
IRM 4.31.13 says a case cannot be sent to Appeals until 60 days after the FPA is issued, to allow the PR time to elect push-out.
Where do penalties go?
Penalties determined at the partnership level go on each partner’s statement with the Code section and rate. See BBA penalties.