IRS grants partnerships additional time to furnish complete Forms 8308

The IRS said Friday that it is providing relief from certain penalties imposed solely for failure of a partnership with unrealized receivables or inventory items to furnish Part IV of Form 8308, Report of a Sale or Exchange of Certain Partnership Interests, to the transferor and transferee in certain transfers of partnership interests in calendar year 2024.

Notice 2025-02 provides relief similar to the relief provided in Notice 2024-19 from penalties under Sec. 6722 for failures by certain partnerships to furnish correct payee statements.

The IRS is aware that many partnerships continue to lack information needed to comply with the reporting requirements in a timely manner. As a result, with respect to Sec. 751(a) exchanges occurring during calendar year 2024, the IRS will not impose penalties for failure to furnish correct payee statements under Sec. 6722 solely for failure to furnish Form 8308 with a completed Part IV if the partnership furnishes to the transferor and transferee:

• A correct copy of Parts I, II, and III of Form 8308, or a statement that includes the same information by the later of Jan. 31, 2025, or 30 days after the partnership is notified of the Sec. 751(a) exchange; and

• A correct copy of the complete Form 8308, including Part IV, or a statement that includes the same information and any additional information required under Regs. Sec. 1.6050K-1(c), by the later of the due date of the partnership’s Form 1065, U.S. Return of Partnership Income, (including extensions) or 30 days after the partnership is notified of the Sec. 751(a) exchange.

This notice does not provide relief with respect to a transferor partner’s failure to furnish the notification to the partnership required by Regs. Sec. 1.6050K-1(d). In addition, the notice does not provide relief with respect to filing Form 8308 as an attachment to a partnership’s Form 1065; as such, it does not provide relief from penalties under Sec. 6721 for failure to file correct information returns.

— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com