IRS Form 15028 Guide: PTP Section 6225(c)(5) Modifications

1. Introduction: What is Form 15028?

IRS Form 15028, officially titled Certification of Publicly Traded Partnership to Notify Specified Partners and Qualified Relevant Partners for Approved Modifications Under IRC Section 6225(c)(5), is a specialized compliance certification published by the Internal Revenue Service (IRS). It is governed by the centralized partnership audit regime established under the Bipartisan Budget Act of 2015 (BBA), administered by the IRS Large Business & International (LB&I) and Small Business/Self-Employed (SB/SE) Divisions.

This form is used exclusively by Publicly Traded Partnerships (PTPs)—such as master limited partnerships whose units trade on public stock exchanges—that are undergoing an IRS BBA examination or submitting an Administrative Adjustment Request (AAR). Form 15028 serves as a formal certification where the PTP promises to notify specific unit holders to reduce their suspended passive activity loss carryovers in exchange for the IRS reducing the partnership’s entity-level audit tax liability under Internal Revenue Code Section 6225(c)(5).

2. Purpose of the Form: Why Does Form 15028 Exist?

Under the BBA audit regime, the default rule requires an audited partnership to pay an “imputed underpayment” (IU) directly at the entity level, calculated by multiplying the net audit adjustments by the highest statutory tax rate (typically 37%). However, federal law allows partnerships to request “modifications” under Section 6225(c) to reduce this imputed underpayment.

Under Internal Revenue Code Section 469(k), passive activity loss rules apply separately to each Publicly Traded Partnership. Unused losses from a PTP cannot offset income from other investments; they are suspended at the partner level and carried forward indefinitely until that specific PTP generates income or the partner sells their units. When an IRS audit increases a PTP’s income, many unit holders already have accumulated suspended passive losses from that PTP that would have wiped out the tax adjustment had it been reported originally. Form 15028 exists to solve this problem while preventing unfair tax duplication:

• Reducing Entity-Level Taxes: Section 6225(c)(5) allows a PTP to reduce its imputed underpayment by taking into account the partners’ available suspended passive activity losses.
• Preventing Double Tax Deductions: If the IRS reduces the PTP’s audit tax because partners had suspended losses, those partners cannot be allowed to keep those same losses to offset future income or capital gains upon selling their units.
• Ensuring Partner-Level Accountability: Because the IRS does not track every individual PTP investor’s loss carryover, Form 15028 requires the PTP to legally certify under penalties of perjury that it will notify each affected partner of the exact dollar reduction to their suspended passive loss carryover.

3. Who Needs to File This Form?

Form 15028 is not filed by general businesses or individual investors. It applies exclusively to large public entities undergoing a BBA partnership audit. Specifically, it must be filed by:

• Publicly Traded Partnerships (as defined under Internal Revenue Code Section 7704(b)) that are subject to the BBA centralized audit regime.
• PTPs that received an official Notice of Proposed Partnership Adjustment (NOPPA, Letter 5892) and are requesting an imputed underpayment modification under Section 6225(c)(5) using IRS Form 8980.
• PTPs filing an Administrative Adjustment Request (AAR) using Form 8082 or Form 1065X that incorporates a Section 6225(c)(5) modification.
• The designated Partnership Representative (PR) or Designated Individual (DI) acting on behalf of an audited PTP.

4. Who Is Exempt / Not Required to File?

Because Form 15028 is tailored strictly to publicly traded entities and passive loss rules, large segments of the partnership community do not use it:

• Private and Closely Held Partnerships: Standard general partnerships, family LLCs, and private equity funds cannot utilize the Section 6225(c)(5) modification and do not file Form 15028.
• PTPs Not Requesting Section 6225(c)(5) Relief: If a PTP chooses to pay the standard imputed underpayment without modification, or makes a Section 6226 “push-out” election, Form 15028 is not required.
• Partnerships That Opted Out of the BBA: Eligible small partnerships that made a valid election out of the BBA regime under Section 6221(b) are audited under individual deficiency procedures and do not use this form.
• Individual Unit Holders and Partners: Individual investors holding units in a PTP never file Form 15028. Unit holders simply receive notification statements or adjusted tax packages from the PTP.

5. When to File: Deadlines and Frequency

Form 15028 is an event-based compliance filing submitted during an active IRS examination or administrative adjustment process. It is not an annual recurring tax return.

During an audit, Form 15028 must be submitted as a supporting attachment to Form 8980 (Partnership Request for Modification of Imputed Underpayments) within the 270-day modification period. This 270-day window begins on the date the IRS mails the Notice of Proposed Partnership Adjustment (NOPPA). If the PTP needs additional time to gather partner loss data, it must submit an extension request using Form 8984 before the 270-day period expires. When used with an Administrative Adjustment Request, Form 15028 is submitted contemporaneously with Form 8082 or Form 1065X.

6. Where and How to File

Under IRS administrative guidelines for BBA audits, Form 15028 must be submitted through designated examination channels rather than standard tax return processing centers:

• Electronic Portal Submission (Required): Audited BBA partnerships are generally required to submit Form 15028 and Form 8980 electronically through the secure IRS BBA Online Forms Submission Service portal.
• Attachment Requirement: Form 15028 is not submitted as a standalone document; it must be uploaded directly alongside Form 8980 (Modification Request) and supporting calculation spreadsheets.
• Direct Delivery to the Examination Team: If electronic submission through the portal is unavailable or specifically excused by the IRS, the signed document must be delivered to the assigned revenue agent or mailed to the designated IRS address as per instructions provided in your audit correspondence.

7. Step-by-Step Instructions to Fill Form 15028

Form 15028 is a formal legal certification document. Although concise, every entry carries binding legal significance under Treasury Regulation Section 301.6225-2(d)(5). The table below outlines the core sections of the form.

Section	Item Name	Required Information & Legal Standard
Header	Partnership Details	Legal name of the PTP, Employer Identification Number (EIN), and audited taxable year(s).
Part I	PTP Status Certification	Affirmation that the entity qualifies as a Publicly Traded Partnership under IRC Section 7704(b).
Part II	Modification Details	Identification of audit adjustments and total dollar value of suspended passive losses utilized.
Part III	Partner Notification Pledge	Binding certification that the PTP will report suspended loss reductions to all specified partners.
Part IV	Representative Execution	Original signature, date, title, and printed name of the Partnership Representative or Designated Individual.

Part 1: Partnership Identification

Enter the complete registered legal name of the Publicly Traded Partnership exactly as reported on its Form 1065. Enter the entity’s nine-digit Employer Identification Number (EIN). In the tax period box, list the specific reviewed year or years under examination that are subject to the Section 6225(c)(5) modification request.

Part 2: PTP Classification and Modification Terms

Verify and certify that the entity meets the statutory definition of a Publicly Traded Partnership under Section 7704(b), meaning its interests are traded on an established securities market or readily tradable on a secondary market. You will reference the related Form 8980 modification request and specify the audit adjustments being modified by available partner passive loss carryovers.

Part 3: The Binding Notification Certification

This is the core legal undertaking of Form 15028. The Partnership Representative certifies under penalties of perjury that:

• The partnership will calculate the exact amount of reduction to suspended passive activity loss carryovers for each “specified partner” (a partner who held units during the reviewed year and had available suspended losses from that PTP).
• The partnership will calculate loss reductions for “qualified relevant partners” in tiered partnership structures where pass-through entities own units.
• The partnership will formally notify each partner of their respective loss reduction in the manner and by the deadline required by Treasury regulations (typically provided alongside or prior to the issuance of Schedule K-1 for the year the audit modification becomes final).
• The partnership will retain all calculation worksheets, partner registries, and proof of notification in its permanent records.

Part 4: Execution by the Partnership Representative

Form 15028 must be executed by the authorized Partnership Representative. If the PR is an individual, that person signs, dates, and prints their name. If the PR is an entity (such as a corporate general partner or management company), the appointed Designated Individual (DI) must sign on behalf of the entity PR, listing their corporate title and the legal name of the entity PR.

8. Required Documents and Information Needed Before Filling

To successfully prepare Form 15028 and support your Section 6225(c)(5) modification request, compile the following records:

• The official Notice of Proposed Partnership Adjustment (NOPPA, Letter 5892) and Form 14792 (Partnership Examination Changes).
• A fully prepared Form 8980 (Partnership Request for Modification of Imputed Underpayments).
• A partner-by-partner schedule detailing specified partners, qualified relevant partners, and their respective suspended passive activity loss carryovers under Section 469(k).
• Mathematical calculations under Treasury Regulation Section 301.6225-2 proving the exact dollar reduction to the imputed underpayment.
• A valid Form 2848 (Power of Attorney) if legal counsel or an accounting firm represents the PTP before the IRS.

9. Common Mistakes to Avoid

Errors on Form 15028 can jeopardize millions of dollars in potential audit tax reductions. Watch out for these frequent mistakes:

• Submitting as a Standalone Document: Form 15028 is an evidentiary certification; it must be submitted as an attachment to Form 8980. Submitting it alone will result in processing rejections.
• Filing for Non-Public Partnerships: Section 6225(c)(5) is strictly reserved for Publicly Traded Partnerships under Section 7704(b). Private partnerships cannot use Form 15028 and must use other modification methods (such as amended returns under Form 8982).
• Missing the 270-Day Deadline: All modification forms, including Form 15028, must be received by the IRS within 270 days of the NOPPA date unless an extension was formally requested using Form 8984.
• Failing to Notify Partners Post-Approval: Signing Form 15028 creates a binding legal obligation. If the PTP receives the modification but fails to issue the required loss-reduction statements to unit holders, the IRS can revoke the modification and assess full taxes.
• Unauthorized Signatures: Only the officially designated Partnership Representative or Designated Individual may sign Form 15028. Signatures from unauthorized corporate officers or outside attorneys lacking power of attorney will be rejected.

10. Penalties for Non-Filing or Errors

Because Form 15028 is a required prerequisite for receiving an imputed underpayment modification, failing to submit it or breaching its terms carries severe financial consequences:

• Immediate Denial of Modification: If the PTP fails to submit Form 15028, the IRS will reject the Section 6225(c)(5) modification request, forcing the partnership to pay the full, unreduced imputed underpayment at the highest statutory tax rate (37%+).
• Retroactive Revocation and Penalties: If the IRS discovers that an approved PTP failed to actually notify its specified partners, the IRS can revoke the modification, reinstate the full imputed underpayment, and assess statutory failure-to-pay penalties and interest.
• Perjury Prosecution: Form 15028 is executed under penalties of perjury. Falsifying partner loss data or submitting fraudulent certifications constitutes a federal crime under 26 U.S.C. Section 7206.
• Securities and Investor Liability: Failing to properly calculate and report loss carryover reductions can lead to inaccurate investor tax packages, exposing the PTP to securities disclosures issues and unit holder litigation.

11. Related Forms or Schedules

Form 15028 functions within an integrated collection of BBA partnership audit and modification documents:

• Form 8980: Partnership Request for Modification of Imputed Underpayments Under IRC Section 6225(c) (the master modification request).
• Form 8981: Waiver of the Period Under IRC Section 6231(b)(2)(A).
• Form 8984: Extension of the Taxpayer Modification Submission Period Under Section 6225(c)(7).
• Form 15027: Partnership Summary of Approved Modifications and the Imputed Underpayments.
• Form 14726: Waiver of the Notice of Final Partnership Adjustment (FPA).
• Form 8082: Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).
• Form 2848: Power of Attorney and Declaration of Representative.

12. Frequently Asked Questions (FAQs)

1. What is an IRC Section 6225(c)(5) modification?

It is a statutory modification procedure under the BBA audit rules that allows a Publicly Traded Partnership to reduce its entity-level imputed underpayment by taking into account the available suspended passive activity loss carryovers of its unit holders under Section 469(k).

2. Who qualifies as a “specified partner” on Form 15028?

A specified partner is an individual or entity that held units in the PTP during the reviewed year under audit and possesses suspended passive activity loss carryovers originating from that same PTP that would offset their allocable share of the audit adjustments.

3. Why must partners reduce their suspended loss carryovers?

Because the PTP utilized those suspended losses to reduce its audit tax bill with the IRS. If the partners did not reduce their personal carryover balances, they would receive a double tax benefit by using the same losses again in future years.

4. Can a private, non-traded partnership file Form 15028?

No. Section 6225(c)(5) and Form 15028 are strictly limited to Publicly Traded Partnerships subject to Section 469(k). Non-traded partnerships seeking modification must use other procedures, such as partner amended returns (Form 8982) or tax-exempt modifications (Form 8983).

5. How does the PTP provide notice to its unit holders?

The PTP generally delivers the notification statement directly to affected unit holders as part of their annual Schedule K-1 tax package, or via separate direct correspondence detailing the exact dollar reduction to their Section 469(k) loss carryover.

6. What happens if the IRS approves Form 8980 with Form 15028 attached?

The IRS will calculate a revised, reduced imputed underpayment reflecting the allowable passive loss offsets and issue Form 15027 (Partnership Summary of Approved Modifications and the Imputed Underpayments) reflecting the final agreed tax liability.

13. Conclusion: Key Takeaways

IRS Form 15028 is a critical administrative bridge for Publicly Traded Partnerships undergoing examination under the BBA centralized audit rules. By legally certifying that the PTP will notify unit holders to reduce their suspended passive activity losses, the partnership can unlock substantial tax reductions on its imputed underpayment.

Because Section 6225(c)(5) modifications require complex partner loss tracking, rigorous mathematical calculations under Treasury Regulation Section 301.6225-2, and strict compliance with the 270-day window, PTP executives should work closely with experienced partnership tax attorneys and certified public accountants when preparing Form 15028.