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Form 8985: Pass-Through Statement — Transmittal/Partnership Adjustment Tracking Report (Required Under Sections 6226 and 6227)
IRS Form 8985 is a Pass-Through Statement — Transmittal/Partnership Adjustment Tracking Report that tracks partnership adjustments for pass-through partners. This form must be submitted by the extended due date of the audited partnership’s adjustment year return.
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IRS Form 8985 - Pass-Through Statement — Transmittal/Partnership Adjustment Tracking Report (Required Under Sections 6226 and 6227)
IRS Form 8985 is a Pass-Through Statement — Transmittal/Partnership Adjustment Tracking Report that tracks partnership adjustments for pass-through partners. This form must be submitted by the extended due date of the audited partnership’s adjustment year return.
Risk Radar
Scan points- 1Ensure the due date entered in Part II, item F matches the required filing deadline.
- 2Failing to submit by the extended due date of the adjustment year return.
- 3Not entering the correct payment due date in Part II, item F.
- 4Omitting required penalty code sections or descriptions in Part IV.
- 5Reporting Schedule K-2 adjustments without corresponding entries in Part IV.
Plain English
This form reports changes or adjustments to income, deductions, and credits passed through from a partnership to an individual partner. It serves as a tracking document showing these financial shifts, especially when an audit occurs. Partners use it to ensure their personal tax returns reflect the correct figures reported by the partnership.
Submission Date
- Filing date: 2025-01-07 22:12:34
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use Form 8985 when summarizing and transmitting Forms 8986 (Partner's Share of Adjustment(s) to Partnership-Related Item(s)) by an audited partnership, administrative adjustment request (AAR) partnership, or pass-through partner.
- Do not use Form 8985 when a pass-through partner is submitting a tax payment related to a BBA exam or BBA AAR; use Form 8985-V instead.
- Check Form 8986 instead when reporting the specific adjustments from Schedule K-3 items.
Form selector
Use this form or another form?
Partner is an AAR partnership
The adjustment year includes the date the AAR was filed with the IRS.
✓ Confirm your filing period matches the AAR submission date.
Pass-through partner made a payment
This form reports the payment and related calculations, such as IU and penalties.
✓ Ensure Part V details the calculation if making a payment.
Need to report Schedule K-2 adjustments
These summary adjustments from other schedules must be reported using the same manner as on Form 8985.
✓ Verify that all relevant K-2 summaries are included.
Deadline or filing window
The filing trigger is the audited partnership’s or AAR partner’s adjustment year return. The submission deadline is the extended due date of that adjustment year return. If you need to correct the initially submitted Form 8985, you have 60 days from the initial due date without IRS permission.
Checklist
What you need before filling it out
Part IV, Column (g)
Total reviewed year adjustments net of approved modifications · Part IV of Form 8985
Payment Confirmation Number
Electronic payment confirmation number obtained at IRS.gov · Part III, item F of Form 8985
Part V Statements (when making a payment)
Detailed calculation of IU plus applicable penalties and interest · Part V of Form 8985
IU Calculation Basis
Highest income tax rate in effect on 12/31/2024 (Example: 37%) · Example Calculation (Instructions p.3)
Form 8985-V Use
Check number must be entered in Part V if paying by check/money order · Instructions for Form 8985 (p.5)
Total Amount Due Calculation
Sum of IU and penalties (Example: $44,400) + Interest (Example: $11,408) · Example Calculation (Instructions p.3)
Before you submit
- 1The form is dated correctly.
- 2If paying electronically, check box 3 and enter the confirmation number in Part III, item F.
- 3If paying by check or money order, check box 4 and enter the check number in Part V.
- 4If prepared by an audited/AAR partnership, ensure the authorized PR or DI has signed and dated it.
- 5If prepared by a pass-through partner, ensure an authorized individual has signed and dated it.
- 6If making a payment, confirm Part V includes a detailed calculation of IU plus penalties/interest (unless pushing out all adjustments).
- 7Verify that Column (g) in Part IV reflects the total reviewed year adjustments net of approved modifications.
How to file this form
- 1Complete Parts I through IV, ensuring Column (g) shows the total reviewed year adjustments net of approved modifications.
- 2If making a payment, complete Part V with a detailed calculation of IU and applicable penalties/interest; if paying electronically, check box 3 and enter the confirmation number in Part III, item F.
- 3Sign and date Form 8985 according to who prepared it (audited partnership, AAR partnership, or pass-through partner).
- 4If submitting by mail, use Form 8985-V when sending a check or money order.
- 5Submit the completed Form 8985 to the IRS using the appropriate submission method.
Known limitations
- 1An audited partnership can submit corrected Forms 8985 and related Forms 8986 within 60 days of the due date without IRS permission.
- 2If corrections are needed after the 60-day period, an audited partnership must contact the IRS for submission permission.
- 3Pass-through partners of an AAR partnership cannot include modifications in their calculation when reporting on Form 8985.
- 4Adjustments that do not result in an IU shown on Form 8986 and are related to an AAR must be pushed out by the pass-through partner.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is December 2024, and users should refer to IRS.gov/Form8985 for the latest information regarding this form and its instructions. This revision includes an update on using Part V statements when making a correction to amounts reported in Part IV.
What changed or needs a fresh check
- Edition date — confirm the revision date reads December 2024.
- Purpose — confirm the form is used to summarize/transmit adjustments or report a payment made by a pass-through partner.
- Signature (Audited/AAR) — confirm the authorized PR or DI for the reviewed year signs and dates if prepared by an audited or AAR partnership.
- Signature (Pass-Through Partner) — confirm the form is signed and dated by an individual with authority to sign the pass-through partner’s tax return if prepared by a pass-through partner.
Quick Facts
Downloads
After you file
- 1Keep a copy of the filed Form 8985.
- 2If submitting payment with Form 8985, use Form 8985-V if sending a check or money order.
- 3For batch submissions, ensure every batch has the same outgoing tracking number (and incoming tracking number, if applicable).
- 4When filing in batches, the first Form 8985 must have box D checked and enter '1 of X' in box E (where X is total batches). Subsequent batches must show their sequential number in box E.
- 5If an audited partnership submits a corrected Form 8985, it should be accompanied by related corrected Forms 8986.
Sources
- SRCInstructions p.1 — The purpose of Form 8985 is stated on page 1.
- SRCInstructions p.2 — An audited partnership can submit corrected Forms 8985 and related Forms 8986 within 60 days of the due date without IRS permission.
- SRCInstructions p.3 — Adjustments that do not result in an IU are taken into account by the pass-through partner in the tax year that includes the date of payment.
- SRCInstructions p.4 — Each batch of Forms 8986 must have an associated Form 8985, and box D should be checked on the summary Form 8985.
- SRCInstructions p.1 — Audited partnership is defined as a BBA partnership that elected under section 6226 to have partners report adjustments.
- SRCInstructions p.3 — Pass-through partner’s calculation of penalties and interest must be included when reporting on Form 8985.
- SRCInstructions p.1 — The revision date is December 2024, and the form governs sections 6226 and 6227.
- SRCInstructions p.3 — AAR partnerships that either elect to push out adjustments or have adjustments without an IU must include Forms 8985 and related Forms 8986 with its AAR.
Common confusion points
Who needs to file Form 8985?
Pass-through partners are the primary filers, but the source also mentions Audited partnerships and AAR partnerships.
→ Check Part I of Form 8985 or the instructions for specific entity roles.
What is an 'Audited partnership'?
It is a BBA partnership that elected under section 6226 to have partners report adjustments, and its adjustment year depends on court decisions or FPA letter mailing.
→ Verify the definition against the audited partnership's filing status.
When must I file Form 8985?
The general due date is the extended due date of the audited partnership’s adjustment year return.
→ Check the specific instructions for your entity type to confirm the exact deadline.
What happens if my adjustments don't result in an IU (Imputed Underpayment)?
If it's related to an AAR, the pass-through partner must push out those adjustments and include a detailed calculation in Part V.
→ Confirm whether the adjustment is for an AAR partnership or not.
How do I report Schedule K-3 vs. Schedule K-2 adjustments?
K-3 adjustments are reported following examples from Form 8986 instructions, while related K-2 (summary) adjustments are reported on Form 8985 in the same manner.
→ Refer to the Instructions for Form 8986 for exact reporting styles.
What is the difference between an AAR partnership and a standard pass-through partner?
An AAR partnership either elects to push out adjustments or has adjustments that don't result in an IU, requiring Forms 8985 and related Forms 8986 be included with its AAR.
→ Check if your entity meets the criteria for being classified as an AAR.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- An audited partnership can file corrected Forms 8985 and related Form 8986 within 60 days of the due date.
Questions about IRS Form 8985
What is IRS Form 8985 used for?
This form reports changes or adjustments to income, deductions, and credits passed through from a partnership to an individual partner. It serves as a tracking document showing these financial shifts, especially when an audit occurs. Partners use it to ensure their personal tax returns reflect the correct figures reported by the partnership.
Who must file IRS Form 8985?
Direct and indirect pass-through partners must submit IRS Form 8985. This includes partners of an audited partnership or a partnership that filed an AAR (After-the-Record) return.
What information does IRS Form 8985 require?
The form collects information in several parts: Part I details the entity submitting the form; Part II covers the audited partnership or AAR partner; Part III is for the specific pass-through partner; and Part IV lists the partners’ total reviewed year income, gain, loss, deduction, credits, and other items.
When is IRS Form 8985 due?
Pass-through partners must submit IRS Form 8985 by the extended due date of the audited partnership’s adjustment year return (or the extended due date of the AAR partnership’s adjustment year return).
Where do I file IRS Form 8985?
The instructions state that where to submit IRS Form 8985-V is detailed on page 8. For general submission, use the location specified in Part II, item F, which shows the payment due date.
How do I complete IRS Form 8985?
First, fill out Part I with entity information and Part II with partnership details. Next, complete Part III with your personal data, then populate Part IV with all reviewed year income and adjustment figures. Finally, include any necessary statements in Part V before signing on page 5.
What happens if IRS Form 8985 is filed incorrectly?
Failure to submit IRS Form 8985 by the required due date may result in a penalty. If corrections are needed after 60 days, the pass-through partner must contact the IRS for permission to submit.
Who needs to file Form 8985?
Pass-through partners are the primary filers, but the source also mentions Audited partnerships and AAR partnerships. Check Part I of Form 8985 or the instructions for specific entity roles.
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