IRS Releases Guidance to Allow Partnerships to Amend their 2018 and 2019 Tax Returns

On April 8, 2020, the IRS also released Revenue Procedure 2020-23, not to be confused with Notice 2020-23, allowing eligible partnerships to file amended tax returns for 2018 & 2019. This is important to many Housing Credit property owners as many file their partnership returns before they receive their 8609s from their state allocating agency which was not a problem until 2018 as the return would have been amended once the 8609s were received. However that changed with the passage of the Bipartisan Budget Act of 2015 (BBA) which disallowed partnerships from amending a tax return after its extended due date and instead required the owner to make an Administrative Adjustment Request (AAR). Under this procedure, any additional credit claim caused by the receipt of the 8609s was claimable in the year the AAR was filed rather than amending the original return which meant these credits were not claimable for a year or more after earned.

Under Revenue Procedure 2020-23, partnerships can amend their returns by September 30, 2020 which replaces any prior return filed allowing affected owners to claim credits on their 2018 return even if an AAR was already filed or in other words, 2018 credits can be claimed in 2018 as long as the 8609s are received by September 30, 2020 and the amended returns filed. This also applies to 2019 claims but only to returns that were filed before this revenue procedure which likely is not very many. This new guidance also allows, in some circumstances, for the partnership to take advantage of bonus depreciation changes provided in the CARES, Act on those returns.

to read the full revenue procedure

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