Accounting News

Wednesday, February 15, 2012
Electronic K-1s

This week we already talked about how electronic document management has the opportunity to change every accounting firm. On the same thread the IRS has issued guidance that allow companies to send out electronic K-1s. K-1s are given partners of the business annually by April 15th (April 17th this year).

To send the K-1 electronically, the recipient must consent to electronic format. The consent must demonstrated that the recipient is able to access the electronic document in the form sent. Examples the IRS gives are sending consent via email if that is how the K-1 will be sent or downloading the consent form off of a website if that is where the K-1 will be accessed. 

If you plan to send K-1s electronically there  are very specific standards that must be followed. For example the subject line of an email with the document or the notification must read "IMPORTANT TAX RETURN DOCUMENT AVAILABLE."

For advice on generating your K-1s or how to send them electronically visit your local public accountant