IRS Instruction 1065-X – IRS Forms, Instructions, Pubs 2026

IRS Instruction 1065-X – IRS Forms, Instructions, Pubs 2026 – In the complex world of partnership taxation, errors on tax returns can happen, but correcting them promptly is crucial to avoid penalties and ensure compliance. IRS Form 1065-X serves as a vital tool for partnerships and real estate mortgage investment conduits (REMICs) to amend previously filed returns or request administrative adjustments. This SEO-optimized guide breaks down the latest instructions for Form 1065-X, drawing from official IRS sources to help business owners, tax professionals, and partnerships navigate the process efficiently. Whether you’re dealing with an amended partnership return or an AAR under the Bipartisan Budget Act (BBA), we’ll cover everything you need to know for tax years relevant to 2026.

What Is IRS Form 1065-X?

Form 1065-X, officially titled “Amended Return or Administrative Adjustment Request (AAR),” is used by partnerships and REMICs to correct errors on previously filed Forms 1065 (U.S. Return of Partnership Income), 1065-B (U.S. Return of Electing Large Partnership), or 1066 (U.S. Real Estate Mortgage Investment Conduit Income Tax Return). It’s not for filing original returns but specifically for amendments or adjustments when inaccuracies in income, deductions, credits, or other items are discovered.

Key purposes include:

  • Correcting mistakes on paper-filed returns.
  • Filing an AAR for BBA partnerships to adjust items without triggering a full audit.
  • Submitting a partnership-partner modification amended return related to an imputed underpayment (IU) in a BBA audited partnership.

Unlike Form 8082 (used for notices of inconsistent treatment), Form 1065-X focuses on direct corrections or requests. For tax years beginning after 2024, use the October 2025 revision of the form and instructions.

Who Must File Form 1065-X?

Not every entity can or should use this form. Here’s a breakdown:

  • Partnerships and REMICs Filing Amended Returns: If you’ve filed a paper return and later identify errors (e.g., incorrect gross receipts, deductions, or net income), use Form 1065-X to amend it. Electronic filers of non-BBA partnerships amend using Form 1065 itself.
  • BBA Partnerships Filing AARs: Partnerships subject to the centralized partnership audit regime (BBA, for tax years after 2017 unless elected out) must file an AAR via Form 1065-X (paper) or electronically with Form 8082 attached to Form 1065. This is handled by the partnership representative (PR) or designated individual (DI).
  • REMICs Under BBA: Those with multiple residual interest holders that haven’t elected out of BBA use it for AARs.
  • Partnership-Partners: A partnership that is a partner in a BBA partnership can file an amended return for IU modifications under section 6225(c)(2).

Non-BBA partnerships (e.g., those electing out with 100 or fewer eligible partners) use Form 1065-X for paper amendments. Always check if your entity qualifies as a BBA partnership on IRS.gov/BBAAAR.

When and Where to File Form 1065-X?

Timing is critical to avoid invalid submissions:

  • Deadlines: File within 3 years from the later of the original return’s filing date or due date (excluding extensions). For BBA AARs, file before a notice of administrative proceeding under section 6231, or within the period specified for IU modifications.
  • Filing Location: Send to the IRS service center where the original return was filed. Electronic filing is mandatory if the original was e-filed; use Form 1065 with Form 8082 for BBA AARs.
  • Special Notes: If adjustments result in an IU, pay it with the AAR or elect to push out to partners. Prepay interest and penalties if applicable.

For refunds over $1 million related to IU, attach Form 8302. Use electronic payment methods like IRS Direct Pay or EFTPS, specifying “BBA AAR Imputed Underpayment.”

How to Complete Form 1065-X: Step-by-Step? Instructions

Completing the form requires attention to detail. Here’s a structured overview based on the official instructions:

Part I: Information About the Entity

  • Enter the partnership or REMIC’s name, EIN, address, and tax year.
  • Check the appropriate box: Amended Return (non-BBA), BBA AAR, or Partnership-Partner Modification.
  • For BBA AARs, indicate if the PR changed (attach Form 8979) and whether adjustments result in an IU.

Part II: Amendments/Adjustments to Partnership Items (For Partnerships)

  • Column (a): Original or previously adjusted amounts.
  • Column (b): Net increase or decrease.
  • Column (c): Correct amounts.
  • Attach supporting schedules (e.g., amended Schedules K-2/K-3 for international items, marked “Amended”).
  • For BBA AARs: Use Forms 8985 and 8986 to furnish adjustments to partners instead of amended K-1s.

Part III: Amendments/Adjustments to REMIC Items (For REMICs)

  • Describe items, list original amounts, net changes, and correct amounts.
  • Similar rules apply for AARs vs. amended returns regarding Schedules Q.

Part IV: Imputed Underpayment (IU) Under Section 6227 (For BBA AARs)

  • Calculate IU by grouping adjustments (reallocation, credit, etc.), subgrouping, netting, and applying the highest tax rate.
  • Report on line 1; pay if applicable or elect push-out.
  • Attach Form 8980 for modifications to reduce IU.

Part V: Explanations

  • Provide detailed explanations for each change, including partner allocations.

Signing and Paid Preparer

  • Sign as required: Partner/LLC member for non-BBA, PR/DI for BBA.
  • Paid preparers use PTIN and provide a copy to the entity.

Key Differences: Amended Return vs. Administrative Adjustment Request (AAR)

  • Amended Return: For non-BBA entities to correct errors; furnish amended K-1s to partners.
  • AAR: For BBA partnerships; adjustments may lead to IU paid by the partnership or pushed to partners via Forms 8985/8986. No amended K-1s. AARs focus on proactive adjustments before audits.

Penalties, Deadlines, and Common Pitfalls

  • Penalties: Late payments incur 0.5% per month (up to 25%) on unpaid tax. Additional penalties for negligence, fraud, or understatements under sections 6662, 6662A, and 6663.
  • Interest on IU: From the reviewed year’s due date; prepay with AAR.
  • Avoid Pitfalls: Don’t file after a BBA notice of proceeding. Ensure electronic filing if required. Attach all supporting documents.

Recent Changes and Updates for 2026

The October 2025 revision removes outdated TEFRA and electing large partnership references. New section 174A allows deductions or amortization for domestic research expenditures; see Rev. Proc. 2025-28 for prior-year elections. Emphasis on BBA procedures, including PR roles and push-out elections.

For the most current details, always refer to the IRS website, as tax laws evolve.

Conclusion: Stay Compliant with IRS Form 1065-X

Mastering Form 1065-X ensures your partnership corrects errors swiftly, potentially saving on penalties and interest. If you’re unsure, consult a tax professional. Download the latest form and instructions from the IRS site to get started. By following these guidelines, you’ll handle amended returns or AARs with confidence in 2026.