What Is Form 8879-PE and Who Needs to Use It?
Understand Form 8879-PE, its purpose, who needs it, and the steps for electronic filing authorization to ensure compliance.
Tax compliance can be a complex process for partnerships and certain entities, especially when it involves electronic filing. Form 8879-PE is a key component in this process, serving as an authorization tool for e-filing partnership tax returns.
Purpose of Form 8879-PE
Form 8879-PE authorizes an electronic return originator (ERO) to submit a partnership’s tax return electronically. It captures the partnership representative’s signature, confirming the accuracy and completeness of the return. The IRS requires the ERO to retain this form for at least three years from the return’s due date or the date the IRS receives it, whichever is later. Retaining this document is essential in case of audits or inquiries.
Who Must Use This Form
This form is required for partnerships filing tax returns electronically through an ERO. It is particularly relevant for partnerships under the Bipartisan Budget Act of 2015 (BBA) centralized partnership audit regime. Partnerships with more than 100 partners or those not opting out of the centralized audit regime typically need to use Form 8879-PE.
Electronic Filing Authorization Steps
The e-filing process begins with selecting an IRS-recognized ERO. The ERO prepares the tax return using specialized software that ensures compliance with current tax regulations. The partnership provides accurate financial data, and the partnership representative reviews the prepared documents for accuracy. Once reviewed, the representative authorizes the ERO to file the return electronically by signing Form 8879-PE.
Signature and Declaration Requirements
The partnership representative’s signature on Form 8879-PE verifies the authenticity and accuracy of the tax return. It serves as a legal acknowledgment that the representative has reviewed and attested to the return’s contents. This declaration confirms that the information provided is true, accurate, and complete.
Correcting an Error or Omission
If errors or omissions are identified after the return has been filed, the partnership must notify the ERO. The ERO works with the IRS to address the issue, which may involve filing an amended return using Form 1065-X. The amended return should clearly outline the error and include supporting documentation. The partnership representative must sign the amended return, reaffirming their responsibility for the updated information. Partnerships have three years from the original filing deadline to submit an amended return.
Possible Penalties and Consequences
Failure to comply with Form 8879-PE requirements or submitting inaccurate information can result in penalties. The IRS may impose penalties for late or incomplete partnership returns, amounting to $220 per partner per month, for up to 12 months. Additional penalties may apply for missing required schedules or attachments. Willfully providing false information can lead to severe consequences, including fines and imprisonment under Internal Revenue Code (IRC) Section 7206. Partnerships can reduce risks by implementing strong internal controls, conducting regular audits, and consulting tax professionals to ensure compliance.