IRS Notices, Rev. Rulings, Rev. Procedures
Rev. Proc. 2012-17 — Rev. Proc. 2012-17
preamble
Part III
Administrative, Procedural, and Miscellaneous
26 CFR 601.602: Tax forms and instructions.
(Also Part 1, ' 6031, 1.6031(b)-1T)
Rev. Proc. 2012-17
SECTION 1. PURPOSE
.01 This revenue procedure provides t he requirements for furnishing substitute
Schedule K-1, Partner's Share of Income, Deductions, Credits, etc., in electronic format.
A partnership (including an Electing Large Partnership, as defined in section 775 of the
Internal Revenue Code) that follows the procedures set forth in this revenue procedure
will satisfy the requirements of section 6031(b) of the Internal Revenue Code and
section 1.6031(b)-1T(a)(1) of the Income Tax Regulations.
SECTION 2. BACKGROUND
.01 Section 6031(a) of t he Code provides, in part, that every partnership shall
make a return for each taxable year, stating specifically the items of its gross income
and deductions, and such other information as the Secretary may by forms and
regulations prescribe, and shall include in the return the names and addresses of the
individuals who would be entitled to share in the taxable income if distributed and the
amount of the distributive share of each individual.
.02 Section 6031(b) provides, in part, t hat each partnership required to file a
return for any partnership taxable year shall (on or before the day on which the return
for such taxable year was required to be filed) furnish to each person who is a partner or
who holds an interest in such partnership as a nominee for another person at any time
during such taxable year a copy of such information required to be shown on such
return as may be required by regulations.
.03 Section 1.6031(b)-1T provides, in par t, that each partnership required to file
a return for any partnership taxable year shall (on or before the day on which the return
for such taxable year is required to be filed) furnish to each person who is a partner or
who holds an interest in such partnership as a nominee for another person at any time
during such taxable year a written statement containing the information prescribed by
section 1.6031(b)-1T(a)(3) and any additional information required by form or
accompanying instructions. This information includes the partner's distributive share of
any partnership income, gain, loss, deduction, or credit required to be shown on the
partnership return.
.04 Rev. Proc. 2011-61, 2011-52. I.R.B. 990, provides guidance on the
requirements for forms accepted as substitutes for official IRS forms. Section 7.1 of
Rev. Proc. 2011-61 sets forth specific guidelines for substitute Schedule K-1s. Section
7.1.1 of Rev. Proc. 2011-61 provides, in part, that substitute Schedule K-1s should be
as close as possible to exact replicas of copies of the official IRS schedules.
SECTION 3. ELECTRONIC FURNISHING OF SCHEDULE K-1
.01 A person required by section 6031( b) to furnish a written statement on
Schedule K-1 (furnisher) to the person to whom it is required to be furnished (recipient)
may furnish the Schedule K-1 in an electronic format in lieu of a paper format. A
furnisher who meets the requirements of Sections 4 through 10 of this revenue
procedure will be treated as furnishing the Schedule K-1 in a timely manner and
complying with the provisions of this revenue procedure.
SECTION 4. CONSENT
.01 In general.
The recipient must have affirmatively consented to receive the
Schedule K-1 in an electronic format. The consent may be made electronically in any
manner that reasonably demonstrates that the recipient can access the Schedule K-1 in
the electronic format in which it will be furnished to the recipient. Alternatively, the
consent may be made in a paper document if the consent is confirmed electronically by
the recipient and that consent reasonably demonstrates that the recipient can access
the Schedule K-1 in the electronic format in which it will be furnished to the recipient. A
new consent is not required if a partnership undergoes a technical termination under
section 708(b)(1)(B).
.02 Withdrawal of consent. The consent requirement of Section 4.01 will not be
satisfied if the recipient withdraws the consent and the withdrawal takes effect before
the statement is furnished. The furnisher may provide that a withdrawal of consent
takes effect either on the date it is received by the furnisher or on a subsequent date
determined by the furnisher and communicated to the recipient within a reasonable
period of time after the furnisher receives the withdrawal. The furnisher may also
provide that a request for a paper statement will be treated as a withdrawal of consent.
.03 Change in hardware or software requirements. If a change in hardware or
software required to access the Schedule K-1 creates a material risk that the recipient
will not be able to access the Schedule K-1, the furnisher must, prior to changing the
hardware or software, provide the recipient with a notice. The notice must describe the
revised hardware and software required to access the Schedule K-1 and inform the
recipient that a new consent to receive the Schedule K-1 in the revised electronic format
must be provided to the furnisher. After changing the revised hardware and software,
the furnisher must obtain from the recipient, in the manner described in Section 4.01 of
this revenue procedure, a new consent or confirmation of consent to receive the
Schedule K-1 electronically.
.04 Examples.
The following examples illustrate the rules of Section 4 of this
revenue procedure:
(1). Example 1.
Furnisher F sends Recipient R a letter stating that R may
consent to receive Schedule K-1 electronically on a website instead of in a paper
format. The letter contains instructions explaining how to consent to receive Schedule
K-1 electronically by accessing the website, downloading the consent document,
completing the consent document and e-mailing the completed consent back to F. The
consent document posted on the website uses the same electronic format that F will
use for the electronically furnished Schedule K-1. R reads the instructions and submits
the consent in the manner provided in the instructions. R has consented to receive the
Schedule K-1 electronically in the manner described in Section 4 of this revenue
procedure.
(2). Example 2. Furnisher F sends Recipient R a secure e-mail stating that R
may consent to receive Schedule K-1 electronically instead of in a paper format. The
secure e-mail contains an attachment instructing R how to consent to receive Schedule
K-1 electronically. The e-mail attachment uses the same electronic format that F will
use for the electronically furnished Schedule K-1. R opens the attachment, reads the
instructions, and submits the consent in the manner provided in the instructions. R has
consented to receive Schedule K-1 electronically in the manner described in Section 4
of this revenue procedure.
(3). Example 3.
Furnisher F posts a notice on its website stating that Recipient
R may receive Schedule K-1 electronically instead of in a paper format. The website
contains instructions on how R may access a secure webpage and consent to receive
the statements electronically. R will receive the K-1 through the secure webpage in the
same format as the consent documents. By accessing the secure webpage and giving
consent in the manner provided in the instructions on the website, R has consented to
receive Schedule K-1 electronically in the manner described in Section 4 of this revenue
procedure.
SECTION 5. REQUIRED DISCLOSURES
.01 In general.
Prior to, or at the time of, a recipient's consent, the furnisher
must provide to the recipient a clear and conspicuous disclosure statement containing
each of the disclosures described in Sections 5.02 through 5.08 of this revenue
procedure. The statement may be electronic or on paper. The statement must provide
instructions on how to access and print the statement.
.02 Paper statement. The furnisher must inform the recipient that the Schedule
K-1 will be furnished on paper if the recipient does not consent to receive it
electronically.
.03 Scope and duration of consent.
The furnisher must inform the recipient of
the scope and duration of the consent. For example, the furnisher must inform the
recipient whether the consent applies to each Schedule K-1 required to be furnished
after the consent is given until it is withdrawn in the manner described in Section 4.02 of
this revenue procedure or only to the first Schedule K-1 required to be furnished after
the consent is given.
.04 Post-consent r equest for a paper statement.
The furnisher must inform the
recipient of any procedure for obtaining a paper copy of the recipient's statement after
providing the consent described in Section 4.01 of this revenue procedure and whether
a request for a paper statement will be treated as a withdrawal of consent.
.05 Withdrawal of consent. The furnisher must inform the recipient that--
(1) The recipient may withdraw c onsent by writing (electronically or on
paper) to the person or department whose name, mailing address, telephone number,
and e-mail address is provided in the disclosure statement;
(2) The furnisher may provide that a withdrawal of consent takes effect
either on the date it is received by the furnisher or on a subsequent date determined by
the furnisher and communicated to the recipient within a reasonable period of time after
the furnisher receives the withdrawal.
(3) The furnisher will confirm th e withdrawal and the date on which it takes
effect in writing (either electronically or on paper); and
(4) A withdrawal of consent does not apply to a statement that was
furnished electronically in the manner described in this revenue procedure before the
date on which the withdrawal of consent takes effect.
.06 Notice of termination. The furnisher must inform the recipient of the
conditions under which a furnisher will cease furnishing statements electronically to the
recipient (for example, the recipient's withdrawal from the partnership).
.07 Updating information. The furnisher must inform the recipient of the
procedures for updating the information needed by the furnisher to contact the recipient.
The furnisher must inform the recipient of any change in the furnisher's contact
information.
.08 Hardware and software requirements.
The furnisher must describe to the
recipient the hardware and software required to access, print, and retain the Schedule
K-1, and the date when the Schedule K-1 will no longer be available on the website.
The furnisher must inform the recipient that the Schedule K-1 may be required to be
printed and attached to a Federal, State, or local income tax return.
SECTION 6. FORMAT
.01 The electronic version of th e Schedule K-1 must contain all required
information and comply with the instructions applicable to the Schedule K-1 and
applicable revenue procedures and publications relating to substitute statements to
recipients.
SECTION 7. NOTICE
.01 In general.
The furnisher must notify the recipient if the statement is posted
on a website. The notice may be delivered by mail, electronic mail, or in person. The
notice must provide instructions on how to access and print the statement. The notice
must include the following statement in capital letters, "IMPORTANT TAX RETURN
DOCUMENT AVAILABLE." If the notice is provided by electronic mail, the foregoing
statement must be on the subject line of the electronic mail.
.02 Undeliverable electronic address.
If an electronic notice described in
Section 7 of this revenue procedure is returned as undeliverable, and the correct
electronic address cannot be obtained from the furnisher's records or from the recipient,
the furnisher must furnish the notice by mail or in person within 30 calendar days after
the electronic notice is returned.
SECTION 8. AMENDED SCHEDULE K-1
.01 If the furnisher has amended a recipient's Schedule K-1 that was furnished
electronically, the furnisher must furnish the amended Schedule K-1 to the recipient
electronically within 30 calendar days of the date that the Schedule K-1 has been
amended. If the recipient's Schedule K-1 was furnished through a website posting and
the furnisher has amended the Schedule K-1, the furnisher must notify the recipient that
it has posted the amended Schedule K-1 on the website within 30 calendar days of
such posting in the manner described in Section 7.01 of this revenue procedure. The
furnisher must provide the amended Schedule K-1 or the notice by mail or in person if--
(1) An electronic notice of the we bsite posting of an original Schedule K-1
or the amended Schedule K-1 was returned as undeliverable; and
(2) The recipient has not provided a new e-mail address.
SECTION 9. ACCESS PERIOD
.01 A Schedule K-1, or amended Schedule K-1, furnished on a website must be
retained on the website for twelve months following the end of the partnership's tax year
to which the Schedule K-1 relates, or six months after the date of issuance of the
Schedule K-1, (or amended Schedule K-1), whichever is later.
SECTION 10. PAPER STATEMENTS AFTER WITHDRAWAL OF CONSENT
.01. If a recipient wit hdraws consent to receive a statement electronically and the
withdrawal takes effect before the statement is furnished electronically, a paper
statement must be furnished. Notwithstanding Section 7.03, an amended Schedule K-1
shall be considered a new statement for purposes of determining whether a paper
statement must be furnished following a withdrawal of consent under this Section when
the withdrawal occurs between the date the original Schedule K-1 was furnished and
the date the amended Schedule K-1 is furnished. A paper statement furnished after the
statement due date under this Section will be considered timely if furnished within 30
calendar days after the date the withdrawal of consent is received by the furnisher.
SECTION 11. APPROVAL OF SUBSTITUTE SCHEDULE K-1
.01 The furnisher will not need IRS appr oval to use a substitute Schedule K-1
under the procedures described in Rev. Proc. 2011-61 if the electronic copy it furnishes
is an exact copy of the official Schedule K-1.
SECTION 12 FAILURE TO FURNISH
.01 If a furnisher fails to comply wit h the requirements of this revenue procedure,
the furnisher may be deemed to have failed to furnish the Schedule K-1 to the recipient.
See section 6722 for penalties for failure to furnish correct payee statements.
SECTION 14. EFFECTIVE DATE
This revenue procedure applies on and after Feb. 13, 2012.
SECTION 15. DRAFTING INFORMATION
.01 The principal author of this revenue procedure is Michael E. Hara of the
Office of Associate Chief Counsel (Procedure and Administration). Mr. Hara may be
contacted at (202) 622-4910 (not a toll-free number).
Source: official text