If your prior-year Schedules K-1 mentioned foreign items in lines 16 and 20c (1065) or lines 14 and 17d (1120-S), or in the accompanying statements, you should receive a Schedule K-3 for 2021.
If you do not receive a 2021 Schedule K-3, then you may need to disclose this on your individual tax return to protect yourself against the $10,000 penalty.
- IRS FAQ 16 indicates that a Form 8082, Notice of Inconsistent Treatment, may need to be filed to alert the IRS of the missing Schedule K-3.
- To be conservative, you may also want to file a Form 8275 Disclosure Statement. Note that if you take this approach, you will later need to amend your 2021 tax return if/when you do receive the missing Schedule K-3.