The IRS Form 8989 Guide: Revoking BBA Push-Out Election

Introduction – What Is Form 8989?

IRS Form 8989, titled Request to Revoke the Election for Alternative to Payment of the Imputed Underpayment, is an administrative tax form governed by the Internal Revenue Service (IRS) and the U.S. Department of the Treasury. It operates under the centralized partnership audit regime created by the Bipartisan Budget Act of 2015 (BBA), codified under Internal Revenue Code (IRC) Section 6226(a).

When an audited partnership receives a Notice of Final Partnership Adjustment (FPA), it can choose to “push out” the audit adjustments to its partners using Form 8988. Form 8989 is the formal petition used by the Partnership Representative (PR) to request official IRS consent to revoke and cancel that push-out election, returning the payment obligation back to the partnership entity.

Purpose of the Form – Why Does Form 8989 Exist?

Under IRC Section 6226, making a push-out election shifts tax liabilities from the partnership to the individual partners who held ownership during the audited year. However, the tax code explicitly states that once a push-out election is made on Form 8988, it is legally binding and cannot be revoked without the express consent of the IRS.

A partnership might change its mind for several business reasons. The partners may decide that issuing individual adjustment statements (Forms 8986) is too costly and damages investor goodwill, or the partnership may secure the capital needed to settle the tax bill cleanly at the entity level. Form 8989 provides the legal procedure to request IRS permission to reverse the push-out decision and restore entity-level payment before partner statements are distributed.

Who Needs to File This Form?

Form 8989 must be filed by the designated Partnership Representative (PR) or Designated Individual (DI) of an audited BBA partnership. A partnership should consider filing Form 8989 if it meets all of the following conditions:

• Previously Filed Form 8988: The partnership made a valid Section 6226 push-out election within 45 days of receiving its Notice of Final Partnership Adjustment.
• Desire to Pay at Entity Level: The partnership leadership decided it is in the best interest of the business to pay the imputed underpayment directly rather than passing the burden to its partners.
• No Partner Statements Issued: The partnership has not yet furnished Forms 8986 to its reviewed-year partners.

Who Is Exempt / Not Required to File?

Most partnerships navigating IRS audits will never use Form 8989. You are exempt or legally barred from using this form under the following circumstances:

• No Push-Out Election Made: The partnership never filed Form 8988. If the partnership defaulted to paying at the entity level, there is no election to revoke.
• Forms 8986 Already Distributed: Under Treasury Regulation Section 301.6226-1(d)(2), the IRS will never approve a revocation request if the partnership has already furnished Form 8986 statements to its partners. Once statements are sent, the push-out is permanent.
• Proceeding with Push-Out: The partnership intends to follow through with pushing out the audit adjustments to its partners.
• BBA Opt-Out Partnerships: Small partnerships that elected out of the centralized BBA audit rules under Section 6221(b).
• Individual Partners: Individual partners cannot file Form 8989; only the recognized Partnership Representative holds legal standing to petition the IRS.

When to File Form 8989

Form 8989 is an event-driven petition that must be filed during a narrow procedural window. It can only be submitted after Form 8988 has been filed, and it must be received by the IRS before any Forms 8986 are furnished to partners.

Timing is critical because the partnership has a statutory deadline to issue Forms 8986 within 60 days of the audit adjustments becoming finally determined. The Partnership Representative must submit Form 8989 quickly enough for the IRS to review the request, grant consent via Letter 5934, and allow the partnership to remit payment before default penalties apply.

Where and How to File

Under IRS administrative guidelines, audited BBA partnerships are generally required to submit Form 8989 electronically. Filings are submitted through the IRS BBA Online Form Submission Service (OFSS) or dedicated BBA digital portal.

The Partnership Representative must download the official fillable PDF from the IRS portal, complete all fields, sign the document using an approved 5-digit e-services PIN signature, and upload the file. If paper submission is authorized under an approved electronic filing waiver, mail the physical form directly to the assigned IRS BBA audit team at the designated IRS address as per instructions on your examination correspondence.

Step-by-Step Instructions to Fill Form 8989

Form 8989 is a concise two-page administrative petition that captures audit identification numbers, representative information, and the legal justification for revoking the push-out election.

Header Information

Enter the legal name of the partnership, its Employer Identification Number (EIN), the audited tax year-end date (the “reviewed year”), and the unique 10-digit Audit Control Number (ACN) found on your FPA or Form 14792. Enter the exact mailing date of the original FPA.

Part-by-Part Section Breakdown

Part & Section	Form Focus	Filing Directions
Part I	Partnership Representative Details	Provide the full legal name, Taxpayer Identification Number (SSN or EIN), business address, and telephone number of the Partnership Representative (and Designated Individual, if the PR is an entity).
Part II (Scope)	Scope of Revocation	Check the applicable box indicating whether you are requesting to revoke the election for the general imputed underpayment, specific imputed underpayments, or all underpayments identified in the FPA.
Part II (Narrative)	Reason for Revocation	Provide a detailed narrative explaining why the partnership is requesting revocation (e.g., partner consensus to pay at the entity level, simplified administration, or secured payment funds).
Part II (Attestation)	Statement Attestation	Certify that the partnership has not furnished any Form 8986 statements to reviewed-year partners regarding the adjustments.
Part III	Perjury Declaration	The Partnership Representative or Designated Individual must sign and date the request under penalties of perjury.

Required Documents and Information Needed Before Filling

Before submitting Form 8989, your legal and financial teams must compile the following audit records:

• Previously Filed Form 8988: A copy of the original Section 6226 push-out election submitted to the IRS.
• Notice of Final Partnership Adjustment (FPA): Letter 5893-A or Letter 5895 showing the final audit determinations.
• 10-Digit Audit Control Number (ACN): The unique case number assigned to your examination.
• Certified Confirmation of Non-Distribution: Written proof from your internal records and transfer agents confirming that no Forms 8986 were sent to partners.
• Entity Payment Strategy: Documentation verifying that the partnership has the necessary funds available to pay the full imputed underpayment, interest, and penalties once the revocation is approved.

Common Mistakes to Avoid

Submitting Form 8989 incorrectly can cause the IRS to reject your request, locking in the push-out election. Watch out for these critical mistakes:

• Furnishing Forms 8986 Before Revoking: Mailing or emailing Form 8986 statements to partners before receiving IRS consent. Once partners receive their statements, the IRS is legally prohibited from approving Form 8989.
• Assuming Automatic Approval: Believing that submitting Form 8989 automatically cancels the push-out. The election remains in effect until the IRS formally issues an approval letter (Letter 5934).
• Unauthorized Signatures: Having an unauthorized managing member, general partner, or outside accountant sign the form. Only the officially recognized Partnership Representative or Designated Individual can legally execute Form 8989.
• Providing Vague Explanations: Writing generic justifications. The IRS expects a clear, reasonable explanation of why revoking the election serves sound tax administration.
• Failing to Prepare Entity Payment: Requesting revocation without having the funds ready to pay the imputed underpayment. Once revoked, the partnership becomes immediately liable for the full tax bill.

Penalties for Non-Filing or Errors

Because Form 8989 is an elective petition for relief, there is no direct penalty for choosing not to file it. However, procedural mistakes carry severe consequences:

• Locked-In Push-Out Obligations: If your Form 8989 request is denied or submitted too late, the partnership remains legally bound to the push-out election.
• Default Entity Liability for Missed Statements: If you assume your revocation is approved without receiving Letter 5934 and fail to issue Forms 8986 within 60 days, you violate push-out rules. The push-out is voided, and the partnership is billed at the maximum 37 percent rate, plus Section 6722 payee statement penalties.
• Failure-to-Pay Penalties: Once the IRS approves Form 8989, the partnership must pay the imputed underpayment promptly. Delays trigger failure-to-pay penalties under Section 6651 and compounding interest under Section 6601.

Related Forms and Schedules

Form 8989 is directly connected to the key procedural forms of the BBA partnership audit regime:

• Form 8988: Election for Alternative to Payment of the Imputed Underpayment – IRC Section 6226 (the original push-out election that Form 8989 revokes).
• Form 8986: Partner’s Share of Adjustment(s) to Partnership-Related Item(s) (the statements that cannot be issued if revoking).
• Form 8985: Pass-Through — Statement Transmittal/Partnership Adjustment Tracking Report.
• Form 8980: Partnership Request for Modification of Imputed Underpayments Under IRC Section 6225(c).
• IRS Letter 5934: The official IRS determination letter granting or denying consent to revoke the push-out election.

Frequently Asked Questions

Is IRS consent guaranteed when filing Form 8989?

No. Under IRC Section 6226(a), revocation is granted solely at the discretion of the IRS. The partnership must show good cause, and the IRS must verify that granting consent will not compromise tax collection or disrupt tax administration.

What happens if the partnership already mailed Forms 8986 to partners?

Under Treasury regulations, the IRS will automatically deny Form 8989 if the partnership has already furnished Forms 8986 to any of its reviewed-year partners. At that point, the push-out election is permanent and irrevocable.

What is IRS Letter 5934?

Letter 5934 is the formal written determination issued by the IRS BBA examination unit in response to Form 8989. It confirms whether your request to revoke the push-out election was approved or denied.

What happens to the tax bill once Form 8989 is approved?

Once approved, the push-out election is canceled. The partnership reverts to the default BBA audit rules, meaning the partnership itself must pay the imputed underpayment, along with applicable interest and penalties, at the entity level.

Can an individual partner submit Form 8989 to stop a push-out?

No. Individual partners do not have the legal authority to revoke a push-out election. Only the officially recognized Partnership Representative or Designated Individual can file Form 8989 on behalf of the partnership.

Can a partnership re-elect the push-out after revoking it?

No. The statutory deadline to elect a push-out under Section 6226 is 45 days from the date the FPA is mailed. Because that 45-day window will have expired by the time a revocation is processed, the partnership cannot re-elect a push-out.

Conclusion – Key Takeaways Summarized

IRS Form 8989 functions as the legal “undo button” for partnerships that elected to push out audit adjustments under Section 6226. It allows an audited partnership to petition the IRS for permission to cancel its push-out election and settle its tax liability at the entity level instead.

To ensure a successful revocation, act quickly before any Forms 8986 are delivered to partners, provide a clear business justification, have the Partnership Representative sign the document, and submit Form 8989 electronically through the IRS BBA portal while waiting for official confirmation via Letter 5934.