In Notice 2019-66 (the Notice), the IRS has announced that the requirement to report partners' shares of partnership capital on the tax basis method will not be effective for partnership tax years beginning in 2019 but will be effective for partnership tax years beginning on or after January 1, 2020. Draft 2019 forms and instructions released earlier this year had proposed requiring partner tax basis capital reporting for 2019. Instead, the Notice states that partnerships should report partner capital accounts for 2019 consistent with 2018 forms and instructions (including the requirement to report negative tax basis capital accounts on a partner-by-partner basis, the computation of which is clarified by the Notice). Partnerships will also be required to include a statement identifying the method upon which a partner's capital is reported (e.g., tax, IRC Section 704(b), GAAP or any other method).

The Notice also delays to partnership tax years beginning on or after January 1, 2020, the requirement for partnerships to report to partners information about separate "Section 465 at-risk activities" and includes some clarifying guidance regarding reporting partners' shares of net unrecognized IRC Section 704(c) gain or loss, notably exempting publicly traded partnerships from the requirement to report their partners' shares of net unrecognized IRC Section 704(c) gain or loss.

A Tax Alert on the Notice is forthcoming.