IRS Releases Draft International Forms for Partnerships
Despite claims of attempting to simplify compliance, in recent years, forms and compliance for international reporting has become much more detailed and complicated. In keeping with this theme, the IRS has released drafts of new forms to allow partnerships to report international items to partners with greater detail.
At first glance, for many taxpayers it is hard to see the need for this reporting. For years, partners have been successfully reporting their share of the international income and taxes. While these forms do provide much more detail, given that it has not been an issue in the past, for many it would appear to be just another form and headache for tax professionals preparing international tax reports.
As of now, the forms have not been finalized and are yet to be required for the 2021 filing season. Therefore, tax professionals should review and comment to the IRS as appropriate. Even if there are taxpayers that might benefit from this additional level of reporting, hopefully the IRS would consider that for many it is only an added burden and allow for an exception when it is not helpful or warranted.