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January 20, 2021

IRS provides penalty relief for certain partnerships errors in reporting partners' capital account balances for 2020 tax years

In Notice 2021-13, the IRS provides partnerships with relief from certain penalties for including incorrect information in reporting partners' beginning capital account balances on 2020 Schedules K-1 filed with partnership returns on Form 1065 and Form 8865. Further, Notice 2021-13 provides relief from accuracy-related penalties for any tax year for the portion on an imputed underpayment attributable to the inclusion of incorrect information on a partner's beginning capital account balance that the partnership reports for the 2020 tax year.