rp-21-29.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.601. Rules and regulations.
(Also Part I, §§ 6031, 6222, 6227.)

Rev. Proc. 2021-29

SECTION 1. PURPOSE

This revenue procedure allows eligible partnerships to file amended partnership
returns for taxable years beginning in 2018, 2019, and 2020 using a Form 1065, U.S.
Return of Partnership Income (Form 1065), with the “Amended Return” box checked,
and issue an amended Schedule K-1, Partner’s Share of Income, Deductions, Credits,
etc. (Schedule K-1), to each of its partners. The option to file amended returns only
applies to partnerships satisfying the requirements of section 3 of this revenue
procedure.

SECTION 2. BACKGROUND
.01 Section 1101(a) of the Bipartisan Budget Act of 2015 (BBA), P.L. 114-74, Title XI
(November 2, 2015), replaced subchapter C of chapter 63 of subtitle F of the Internal
Revenue Code (Code) effective for partnership taxable years beginning after
December 31, 2017. Prior to the enactment of the BBA, subchapter C of chapter 63

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contained the unified partnership audit and litigation rules enacted by the Tax Equity
and Fiscal Responsibility Act of 1982 (TEFRA), P.L. 97–248 (September 3, 1982), that
were commonly referred to as the TEFRA partnership procedures. Section 1101(c) of
the BBA replaced the TEFRA partnership procedures with a centralized partnership
audit regime that, in general, determines, assesses, and collects tax at the partnership
level. The centralized partnership audit procedures enacted by the BBA are found at
sections 6221 through 6241 of the Code. The centralized partnership audit procedures
apply to all partnerships, unless the partnership makes a valid election under section
6221(b) not to have those procedures apply. Partnerships subject to the centralized
partnership audit regime are referred to as BBA partnerships.
.02 Section 6031(a) of the Code requires every partnership to file a return for each
taxable year stating the items of its gross income and the deductions allowable by
subtitle A of the Code and such other information as required by forms and regulations,
including information about the partners in the partnership. For a partnership, the return
required by section 6031(a) is Form 1065, which includes Schedules K-1. A Schedule
K-1 reports a partner’s name, taxpayer identification number, and distributive share of
partnership-related items and other information related to the partner’s interest in the
partnership. Section 6031(b) requires that a partnership required to file a return under
section 6031(a) furnish a copy of the Schedule K-1 to each partner that includes such
information as may be required to be shown by regulations. In general, section 6031(b)
also prohibits BBA partnerships from amending the information required to be furnished
to their partners after the due date of the return, unless specifically provided by the
Secretary of the Treasury or her delegate. This revenue procedure exercises that

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authority to allow a BBA partnership to file an amended partnership return and furnish
amended Schedules K-1 under the circumstances described in this revenue procedure.
.03 Section 6222(a) of the Code requires partners in a BBA partnership to treat
partnership-related items, as defined in section 6241 and the corresponding regulations,
consistently on the partner’s return with how the BBA partnership treated such items on
its return. This consistency requirement generally applies to all partners. Consistent
treatment with the partnership generally requires that partners in a BBA partnership file
their returns consistent with the information reported to them on the Schedule K-1.
.04 Section 202 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020
(TCDTRA) was enacted as part of Title II of Division EE of the Consolidated
Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat. 1182 (December 27, 2020).
Section 202 of the TCDTRA retroactively allows a recovery period of 30 years under the
alternative depreciation system (ADS) in section 168(g) of the Code for certain
residential rental property, as defined in section 168(e)(2)(A) of the Code, placed in
service before January 1, 2018, held by an electing real property trade or business as
defined in section 163(j)(7)(B) of the Code, and not previously subject to the ADS. This
revenue procedure explains how a BBA partnership that wishes to change its recovery
period under section 168(g) of the Code for such property in accordance with section
202 of the TCDTRA may do so without filing an administrative adjustment request
(AAR) under section 6227 of the Code. This revenue procedure is intended to be
implemented in tandem with Revenue Procedure 2021-28, 2021-27 I.R.B. ____,
released on June 17, 2021.

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.05 This revenue procedure allows BBA partnerships the option to file an amended
return instead of an AAR, though it does not prevent a partnership from filing an AAR to
obtain the benefits of the TCDTRA or any other tax benefits to which the partnership is
entitled. A BBA partnership that files an amended return pursuant to this revenue
procedure is still subject to the centralized partnership audit procedures enacted by the
BBA.
SECTION 3. AMENDED RETURN OPTION PROVIDED TO ELIGIBLE BBA
PARTNERSHIPS FOR THE 2018, 2019, AND 2020 TAXABLE YEARS
.01 Scope. The filing and furnishing option provided by section 3.02 of this revenue
procedure applies to BBA partnerships described in section 3.03 of this revenue
procedure for the taxable years described in section 3.04 of this revenue procedure.
.02 Option to file amended return. BBA partnerships that filed a Form 1065 and
furnished all required Schedules K-1 for the taxable years beginning in 2018, 2019, or
2020 and did so prior to the issuance of this revenue procedure may file amended
partnership returns and furnish corresponding Schedules K-1 on or before October 15,
2021. The amended returns must take into account tax changes under section 202 of
the TCDTRA, but eligible BBA partnerships under section 3.03 of this revenue procedure
may make any changes on their amended returns.
.03 Eligible BBA partnerships.
(1) The filing and furnishing option provided in section 3.02 of this revenue
procedure is available only to BBA partnerships that filed Forms 1065 and furnished
Schedules K-1 for the partnership taxable years beginning in 2018, 2019, or 2020 and

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did so prior to the issuance of this revenue procedure. The filing and furnishing option
in section 3.02 of the revenue procedure is only available to:
(a) BBA partnerships within the scope of section 3 of Rev. Proc. 2021-28 that
have residential rental property within the scope of section 3 of Rev. Proc. 2021-28 and
that choose to change either or both of their method of depreciation or general asset
account treatment for such property by filing an amended Form 1065 in accordance with
procedures in sections 4.01(2), 4.02(3), or 4.04(1) of Rev. Proc. 2021-28 as applicable,
or
(b) BBA partnerships within the scope of section 3.01(1) of Revenue Procedure
2020-22, 2020-18 I.R.B. 745, that choose to make a late section 163(j)(7) election by
filing an amended Form 1065 in accordance with procedures in section 4 of Rev. Proc.
2020-22.
(2) For purposes of section 6222, the amended return replaces any prior return
(including any AAR filed by the partnership) for the taxable year for purposes of
determining the partnership’s treatment of partnership-related items. See section 4.03
of this revenue procedure for a special rule regarding partnerships who have previously
filed AARs for an affected taxable year.
.04 Eligible taxable years. The filing and furnishing option provided in this revenue
procedure applies only to partnership taxable years that began in 2018, 2019, or 2020.
SECTION 4. PROCEDURE
.01 Filing requirements. To take advantage of the option to file an amended return
provided by section 3 of this revenue procedure, a BBA partnership must file a Form
1065 (with the “Amended Return” box checked) and furnish corresponding amended

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Schedules K-1. The BBA partnership must clearly indicate the application of this
revenue procedure on the amended return and write “FILED PURSUANT TO REV
PROC 2021-29” at the top of the amended return and attach a statement with each
Schedule K-1 furnished to its partners with the same notation. The BBA partnership
may file electronically or by mail but filing electronically may allow for faster processing
of the amended return.
.02 Special rule for BBA partnerships whose returns are under examination. If a BBA
partnership is currently under examination for a taxable year beginning in 2018, 2019,
or 2020 and wishes to take advantage of the option to file an amended return provided
by section 3 of this revenue procedure, the partnership may only do so if the partnership
sends notice in writing to the revenue agent coordinating the partnership’s examination
that the partnership seeks to use the amended return option described in this revenue
procedure prior to or contemporaneously with filing the amended return as described in
section 4.01 of this revenue procedure. The partnership must also provide the revenue
agent with a copy of the amended return upon filing.
.03 Special rule for BBA partnerships who have previously filed an AAR. If a BBA
partnership has previously filed an AAR and wishes to file an amended return pursuant
to this revenue procedure for the same taxable year, the partnership should use the
items as adjusted in the AAR, where applicable, in lieu of any reporting from the
originally filed partnership return.
.04 Coordination with Notice 2019-46. If, under Notice 2019-46, 2019-37 I.R.B. 695,
a partnership has applied the rules of the proposed GILTI regulations under proposed
§1.951A-5 of the Income Tax Regulations for its taxable years ending before June 22,

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2019 (Form 1065, Form 8992, U.S Shareholder Calculation of Global Intangible Low-
Taxed Income (GILTI), and Schedules K-1), the partnership may continue to apply the
rules of proposed §1.951A-5 for purposes of filing an amended Form 1065 for taxable
years to which Notice 2019-46 applies under this revenue procedure if the partnership
furnishes amended Schedules K-1 consistent with those proposed regulations and
provides appropriate notifications to its partners under the principles of section 5.01 of
Notice 2019-46 within the period described in section 3.02 of this revenue procedure.
Nothing in this revenue procedure changes a partnership’s obligation to provide
information described in section 5.02 of Notice 2019-46. If a partnership applies the
final GILTI regulations under §1.951A-1(e), any amended Schedules K-1 issued under
this revenue procedure must be consistent with those final regulations.
SECTION 5. DRAFTING INFORMATION
The principal author of this revenue procedure is Joy E. Gerdy Zogby of the Office of
the Associate Chief Counsel (Procedure and Administration). For further information,
please contact 202-317-4927 (not a toll-free call).