Washington, D.C. (June 8, 2021) – The American Institute of CPAs (AICPA) submitted recommendations to the Internal Revenue Service (IRS) to simplify and improve the administrative adjustment request (AAR) process under the centralized partnership audit regime (CPAR). The recommendations provide a simplified framework that the AICPA is referring to as a Form AAR-EZ.
The AICPA recommends the following:
Short-term simplification measures under the existing AAR process
Instruction changes, clarifications and attachments
Long-term AAR simplification
Proposed Form AAR-EZ process
Deemed automatic extension request(s) under the superseding return rules
Limited amended partnership returns in the case of retroactive changes
Completing and filing AARs can be a time-consuming, administrative burden for partnerships and practitioners. Making minor adjustments to previously filed partnership returns, including those that are not relevant in determining the tax liability of any partners, is unreasonably difficult due to the complexity of the AAR process.
The proposed AAR-EZ would provide short and long-term solutions to correct minor administrative errors that occur when completing partnership tax returns, such as a transposition error in a partner’s social security number or address on an issued Schedule K-1. This would alleviate bottlenecks and resource constraints, streamline the AAR process and increase compliance.
Veronica L. Vera