In September 2021, the IRS finalized new international reporting schedules, the Schedules K-2 and K-3 (the “Schedules”), for the 2021 tax year. The Schedules introduce new reporting requirements intended to standardize and improve the quality of information provided related to international tax matters.
While some of the information is a continuation of items previously reported on Schedules K-1 and the accompanying whitepaper detail, in certain instances these Schedules require a significant expansion of detail and may also require supplemental attachments. The Schedule K-2 is 19 pages with 12 parts, and the Schedule K-3 is 20 pages with 13 parts. There are over 2,000 potential information fields on the Schedule K-3, and each part relates to a different international tax provision.
While the Schedules may appear to only apply to partnerships with items of international tax relevance, even a domestic partnership with domestic business likely will be required to complete certain parts. Given that the IRS has started a concerted effort to address partnership issues and that the Schedules will allow the IRS to easily match the same items to the partners’ tax returns, identifying what parts are required to be completed by a partnership and the additional information needed to complete the Schedules will be critical.
KPMG LLP is pleased to invite you to our special event, Navigating the Uncharted Waters of the Schedules K-2 and K-3. The agenda will cover the following items:
- Schedule K-2 and K-3 Background
- Schedule K-2 and K-3 Overview
- Transition Relief
- Key Considerations
- Frequently Asked Questions
We look forward to your participation.