The U.S. tax system is a voluntary compliance tax system. It is impossible for the IRS to calculate and directly assess each individual or entity taxpayer. Therefore, the system works by having taxpayers gather the necessary information to self-report and assess their own tax obligations and make payment each calendar year when due. Numerous IRS procedures, rules, regulations, and forms are in place to encourage compliance is met (and avoid a tax audit). The Form K-1 is just one example of the complex web of reporting forms to ensure compliance.
What Is A Form K-1?
Form or “Schedule” K-1 is a Federal tax reporting form. Like 1099s or 1098s, the form is produced to report necessary information to the IRS with regards to your Federal income tax filing when calculating your tax liability for the calendar year.
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