Reminder: Only populate the Partnership Level Tax line after a centralized federal partnership audit March 2020 Tax News

The Partnership Level Tax (PLT) line on Forms 565 or 568 should only be used to report changes or corrections made by the IRS under the centralized partnership audit regime, commonly referred to as a CPAR audit. There should be no amount entered for PLT on a timely filed original return. The PLT line is only used when a partnership or limited liability company (LLC) needs to amend their return to report entity level tax resulting from adjustments made by the IRS.

This new line to report entity level tax first appeared on our 2018 tax forms. As part of an education and outreach effort, during the 2019 filing season we reached out to over 800 partnerships and LLCs that incorrectly included an amount on the PLT lines.

Moving forward, as we process returns, we will monitor the correct use of this new line. If a PLT amount is entered on the return, a Return Information Notices (RIN) may be issued as a part of our normal return processing. If your client receives a RIN and disagrees with the adjustments or need clarification, please follow the guidance provided in our FTB 5949 Publication, Return Information Notice Explanation.