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Updated: New Form 990 Requirement for Schedule K-1 Reporting on Joint Ventures and Other Partnerships Optional for 2011

April 20, 2012

UPDATE: IRS Announcement Confirms K-1-Based Reporting of Joint Ventures and Partnership Investments on Form 990 Is Optional for 2011

Internal Revenue Service Announcement 2012-19 confirms the IRS position that the new Form 990 requirement for reporting of information of joint ventures and other partnerships based on K-1s will only be optional for tax year 2011.

The announcement explains that the IRS decided to make the reporting requirement optional for the 2011 tax year so that it may continue to consider comments received from filers and determine how best to move forward on this issue, balancing compliance and transparency while minimizing the burdens associated with reporting.

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March 26, 1012

The Internal Revenue Service announced on March 22 that the new Form 990 requirement for Schedule K-1 reporting of information on joint ventures and other partnerships will be optional for 2011.

This new requirement to report income, expenses, and balance sheet items related to partnership investments based on Schedule K-1 information first appeared in the 2011 Form 990 and instructions released by the IRS on January 21, 2012. Historically, partnership information on the Form 990 was reported consistent with all other financial data based on an organization's books and records.

Shifting to K-1-based reporting of partnership information was expected to create a number of inconsistencies in Form 990 reporting of financial information. It was also likely to add substantial administrative burden for many colleges and universities, particularly institutions that receive a large number of Schedules K-1 related to partnership investments.

In a document on the IRS web site entitled "2011 Form 990 and 990-EZ –Significant Changes," it is noted that the new reporting requirement has been made optional for each of the affected areas of the return: Part VIII, Statement of Revenue; Part X, Balance Sheet; and Appendix F, Disregarded Entities and Joint Ventures.

It is unclear where the IRS is headed with respect to future reporting of joint ventures and partnership investments. NACUBO continues to examine the issue and will submit comments to the Service regarding reporting changes for 2012 and future years.

Contact

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail