IRS Form 8985-V – If your pass-through entity (such as a partnership, S corporation, or trust) receives a Form 8986 from a BBA-audited partnership or one that filed a BBA Administrative Adjustment Request (AAR), you may need to handle an imputed underpayment. IRS Form 8985-V (Tax Payment by a Pass-Through Partner) serves as the official voucher for making that payment by check or money order.
This comprehensive guide, based exclusively on current IRS resources (Form 8985-V Rev. December 2019 and Instructions for Forms 8985 and 8985-V Rev. December 2024), explains everything you need to know. Use it to avoid penalties and ensure compliance under the Bipartisan Budget Act (BBA) centralized partnership audit regime.
What Is IRS Form 8985-V?
Form 8985-V is a one-page payment voucher that pass-through partners use when they choose to pay an imputed underpayment (IU), plus any penalties and interest, at the entity level instead of pushing the adjustments out to their own partners.
It pairs exclusively with Form 8985 (Pass-Through Statement – Transmittal/Partnership Adjustment Tracking Report). The IRS designed Form 8985-V solely for payments made by check or money order. For electronic payments, indicate the confirmation number directly on Form 8985 (Part III, item F) — no voucher is needed.
Key facts:
- Revision date: December 2019 (still current as of 2026).
- OMB No. 1545-0123 | Cat. No. 71711W.
- Download the official PDF here: https://www.irs.gov/pub/irs-pdf/f8985v.pdf.
- Always pair it with the latest instructions: IRS Instructions for Form 8985 and 8985-V (December 2024).
This form applies only under the BBA regime (generally for tax years beginning on or after January 1, 2018).
Who Must File Form 8985-V?
You (or your pass-through entity) must file Form 8985-V if all these conditions are met:
- You are a direct or indirect pass-through partner (partnership, S corporation, trust, or decedent’s estate — not a disregarded entity or wholly owned trust).
- You received a Form 8986 reflecting adjustments from a BBA-examined (audited) partnership or a BBA AAR partnership.
- You choose to pay the imputed underpayment at the pass-through partner level instead of issuing Forms 8986 to your own partners.
- You are making the payment by check or money order (not electronically).
Important exclusions:
- Do not use Form 8985-V if you file Form 1040, 1120, or 990-T as the ultimate taxpayer. Use Form 8978 (Partner’s Additional Reporting Year Tax) instead.
- Wholly disregarded entities cannot use it as pass-through partners.
- If you push adjustments out to your partners, you skip Form 8985-V entirely and issue Forms 8986.
When Is Form 8985-V Required? (BBA Exam vs. BBA AAR)?
Two main scenarios trigger its use:
- BBA Exam Push-Out (“BBA exam push out”)
An audited BBA partnership elects under section 6226 to push adjustments to partners. You receive Form 8986 and decide to pay the IU yourself. - BBA AAR Push-Out (“BBA AAR push out”)
A BBA partnership files an Administrative Adjustment Request (AAR) under section 6227. You receive Form 8986 and elect to pay any resulting IU at your level.
Deadline reminder: Submit by the extended due date of the audited or AAR partnership’s adjustment-year return (shown in Form 8985, Part II, item F, or the corresponding Form 8986). Late submission can trigger penalties.
Note on AAR adjustments: You must push out any adjustments that do not result in an imputed underpayment.
Step-by-Step: How to Complete Form 8985-V?
Follow these instructions directly from the official IRS guidance:
- Type of Payment (upper left checkboxes)
Check “BBA exam push out” if the audited partnership’s Form 8985 (Part I, item A, box 2) applies.
Check “BBA AAR push out” if box 4 applies. - Amount You Are Paying by Check or Money Order
Enter the total dollar amount of the payment. - Payment Due Date (MM/DD/YYYY)
Copy the date from the corresponding Form 8985, Part II, item F (extended due date of the adjustment-year return). - This Payment Amount Is For (checkboxes)
Select the appropriate box(es):- An imputed underpayment
- Penalties
- Interest
- (Include the Audit Control Number if applicable)
- Type of Tax Return Filed by the Partner
Check the box matching your entity’s return (Form 1065, 1120-S, 1041, or Other). - Partner’s TIN
Enter your pass-through partner’s Taxpayer Identification Number. - Name of Pass-Through Partner
Enter the exact name from Form 8985, Part III, item A. - Address, City, State, ZIP Code, Foreign Country/Province/Postal Code
Enter the full address exactly as shown on Form 8985, Part III, item A. - Partner’s Applicable Tax Year Ending Date (MM/DD/YYYY)
Copy from Form 8985, Part III, item C. - Audit Control Number (if applicable)
Enter the number from the top of Form 8985 (or the incoming tracking number for AAR-related payments). - Partner’s Representative
Enter the name and phone number of the individual who signed Form 8985.
Do not staple or attach the check/money order to the voucher. Enclose it loosely.
How and Where to Submit Form 8985-V + Payment?
Mail the completed Form 8985-V with your check or money order to:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0011
- Make the check or money order payable to “United States Treasury.”
- Write your TIN and “Form 8985” on the payment.
- Do not send cash.
Electronic payments (preferred): Pay via IRS.gov and enter the confirmation number on Form 8985 instead of using Form 8985-V.
Submission of the related Form 8985:
- Audited partnership packages → Electronic via IRS.gov/BBAeSubmit.
- AAR-related pass-through partners → Fax to 888-981-6982 (or mail if over 100 pages).
Form 8985-V vs. Form 8985: Quick Comparison
| Aspect | Form 8985 | Form 8985-V |
|---|---|---|
| Purpose | Transmittal & tracking report | Payment voucher (check/money order only) |
| Used by | Audited partnerships, AAR partnerships, pass-through partners | Pass-through partners making check payments only |
| Payment method | Reports electronic or check payments | Only for check/money order |
| Required with payment? | Yes (always) | Yes, only when paying by check/money order |
Common Mistakes to Avoid
- Using Form 8985-V for electronic payments.
- Forgetting to check the correct “Type of Payment” box (exam vs. AAR).
- Submitting after the extended due date of the adjustment-year return.
- Using it when you should file Form 8978 instead.
- Not including detailed IU, penalty, and interest calculations in Form 8985 Part V.
- Stapling the check to the voucher.
Frequently Asked Questions (FAQ)
Q: Can I pay electronically instead?
A: Yes — and it is recommended. Simply check the electronic payment box on Form 8985 and enter the confirmation number. Skip Form 8985-V.
Q: What if my pass-through partner is an S corporation?
A: You can still use Form 8985-V if you are paying the IU at the entity level (and do not push out to shareholders).
Q: Is Form 8985-V required every year?
A: No — only when you receive a Form 8986 and elect to pay the IU yourself via check/money order.
Q: Where do I find the latest version?
A: Always download from IRS.gov. The form remains December 2019; instructions were last updated December 2024.
Q: What happens if I miss the deadline?
A: You may face penalties, and the IRS could hold the original partnership liable in some cases.
Final Thoughts and Next Steps
IRS Form 8985-V is a critical but narrow tool in the BBA partnership audit and AAR process. When used correctly alongside Form 8985, it lets pass-through entities efficiently handle imputed underpayments without pushing adjustments downstream.
For the most accurate guidance, always consult the official IRS instructions and consider working with a tax professional experienced in BBA centralized audits. Tax rules can be complex, and proper calculations of imputed underpayments, modifications, penalties, and interest are essential.
Download Form 8985-V now: https://www.irs.gov/pub/irs-pdf/f8985v.pdf
View full instructions: https://www.irs.gov/instructions/i8985
Stay compliant and avoid unnecessary penalties by reviewing your Form 8986 package carefully and acting before the extended due date of the adjustment-year return.
This article is for informational purposes only and is not tax or legal advice. Refer to official IRS publications and consult a qualified tax advisor for your specific situation.