IRS Form 8989 – In the complex world of partnership taxation, navigating audit adjustments under the Centralized Partnership Audit Regime (often referred to as the BBA regime) can be challenging. One key tool for partnerships is IRS Form 8989, officially titled “Request to Revoke the Election for Alternative to Payment of the Imputed Underpayment.” This form allows partnerships to reverse a prior decision to “push out” tax adjustments to individual partners, shifting the liability back to the partnership itself. If you’re a partnership representative dealing with an imputed underpayment from a BBA audit, understanding Form 8989 is essential for compliance and strategic tax planning.
This article breaks down everything you need to know about IRS Form 8989, including its purpose, filing requirements, and step-by-step guidance. We’ll draw from official IRS resources and trusted tax explanations to ensure accuracy. Whether you’re searching for “how to file IRS Form 8989” or “what is the push out election under section 6226,” we’ve got you covered.
What Is the Centralized Partnership Audit Regime (BBA)?
Before diving into Form 8989, it’s important to understand the context. The Bipartisan Budget Act of 2015 (BBA) introduced the Centralized Partnership Audit Regime, which replaced the older TEFRA procedures for partnership audits. Under this regime, the IRS audits partnerships at the entity level, and any resulting “imputed underpayment” (essentially, additional tax owed due to adjustments) is generally paid by the partnership itself.
However, partnerships have an alternative: the “push out” election under Internal Revenue Code (IRC) Section 6226. This election allows the partnership to push the adjustments out to the “reviewed year partners” (the partners during the tax year under audit), making them responsible for the additional tax, penalties, and interest. The election is made using IRS Form 8988 and must be filed within 45 days of the IRS mailing the Notice of Final Partnership Adjustment (FPA).
Once made, this election is irrevocable without IRS consent—which is where Form 8989 comes in.
What Is IRS Form 8989 and Its Purpose?
IRS Form 8989 is specifically designed for partnerships to request IRS approval to revoke a previously made push out election under Section 6226. By revoking the election, the partnership agrees to pay the imputed underpayment directly, along with any applicable penalties and interest under IRC Section 6233. This can be a strategic choice if pushing out adjustments to partners would complicate matters, such as in cases with numerous or uncooperative partners.
Key purposes of Form 8989 include:
- Reversing the alternative payment method (push out) back to the default partnership-level payment.
- Applying to either a general imputed underpayment or a specific one identified in the FPA.
- Ensuring compliance with BBA audit procedures by obtaining IRS consent before finalizing partner statements.
The form was last revised in October 2020, and as of the latest IRS listings, this version remains in use. You can download the PDF directly from the IRS website at https://www.irs.gov/pub/irs-pdf/f8989.pdf.
Who Needs to File IRS Form 8989?
Form 8989 is relevant for partnerships audited under the BBA regime that have already made a push out election via Form 8988 but now wish to revoke it. Specifically:
- Eligible Entities: Partnerships (including LLCs taxed as partnerships) subject to BBA rules. This excludes small partnerships that opted out of BBA.
- Filing Responsibility: The Partnership Representative (PR) must sign and submit the form. The PR is the designated individual or entity authorized to act on behalf of the partnership in IRS matters.
- When to Consider Filing: If the push out election no longer makes sense—e.g., due to administrative burdens or partner disputes. However, revocation won’t be approved if the partnership has already furnished statements to reviewed year partners under Reg § 301.6226-2(b)(1).
Note: Revocation requests must be submitted and approved before any partner statements are issued. Upon approval, the partnership becomes liable for the underpayment as if the election was never made.
How to File IRS Form 8989: Step-by-Step Guide?
Filing Form 8989 involves electronic submission for audited BBA partnerships, as paper filings are not accepted in this context. Here’s a clear process based on current IRS procedures:
- Prepare the Form:
- Indicate whether the revocation applies to a general imputed underpayment or a specific one.
- Provide details from the FPA notice, including the audit control number (ACN) and EIN.
- The form requires the PR’s signature, using a 5-digit e-Services PIN.
- Obtain Required Codes:
- Secure a PBBA Transmitter Control Code (TCC) and e-Services PIN through the IRS e-Services portal.
- For push-out related submissions, obtain a Tracking Number via the BBA Online Forms Submission Service by entering the PBBA TCC, ACN, and EIN.
- Submit Electronically:
- Use the IRS BBA Online Form Submission Service.
- Submit the form in its original fillable PDF format.
- Attachments (if needed) can be PDF, Word, or Excel files in a ZIP file under 100MB, without encryption.
- The typed name must match the TCC application exactly (case-sensitive).
- Timelines and Deadlines:
- Submit before furnishing any statements to partners (typically within 60 days after adjustments are final).
- The IRS will review and either approve or deny the request. There’s no fixed timeline for IRS response, but act promptly during the audit process.
- Handle Rejections:
- If rejected, review the rejection report, make corrections, and resubmit.
For related forms, you may also need Form 14726 (Waiver of the Notice of Final Partnership Adjustment) or others listed in BBA procedures.
Key Requirements and Considerations for Form 8989
- Attachments: Include a copy of the original FPA notice if relevant.
- Irrevocability Without Consent: The push out election can’t be undone unilaterally; IRS approval via Form 8989 is mandatory.
- Electronic Mandates: As of updates in 2025, electronic submission is required for BBA-audited partnerships to streamline processing.
- Penalties for Non-Compliance: Failing to properly revoke or handle imputed underpayments can lead to additional interest and penalties under Section 6233.
- Related Regulations: Refer to Prop Reg § 301.6226-1(a) and Reg § 301.6226-2(b)(1) for detailed rules.
Recent Updates and Changes to Form 8989
The form’s last revision was in October 2020, with no major changes noted in recent IRS publications. However, electronic submission requirements were emphasized in a 2025 IRS update for BBA partnerships, ensuring faster processing during audits. Always check the IRS website for the latest version before filing.
If your partnership is undergoing a BBA audit, consult a tax professional to evaluate whether revoking the push out election aligns with your overall tax strategy.
Conclusion: Simplify Your BBA Audit Compliance with Form 8989
IRS Form 8989 provides a critical mechanism for partnerships to adapt to audit outcomes by revoking the push out election and assuming direct liability for imputed underpayments. By following the electronic filing process and timing your request correctly, you can avoid unnecessary complications with partners. For the most current guidance, download the form from the IRS site and review related BBA resources.
If you have questions about “revoking IRS push out election” or need help with Form 8989 filing, consider reaching out to an IRS-certified tax advisor. Staying compliant not only avoids penalties but also optimizes your partnership’s tax position.