IRS Publication 541


DEFINITION of 'IRS Publication 541'

A document published by the Internal Revenue Service (IRS) that provides tax information for partners and partnerships. IRS Publication 541 is a supplement to Form 1065, used to report a partnership's income, and Schedule K-1. Income earned by a partnership is not typically taxed by the IRS; rather, the partnership's income is passed on to the individual partners and taxed as regular income.

BREAKING DOWN 'IRS Publication 541'

Partnerships organized before 1996 fall under a different set of guidelines than today, but the IRS still treats them as partnerships provided that the partnership still has two or more members. IRS Publication 541 indicates which organizational types with at least two members are not considered partnerships, including insurance companies, real estate investment trusts and tax-exempt organizations.

  1. Schedule K-1

    A tax document used to report the incomes, losses and dividends ...
  2. Form 1065

    A tax document used to report the profits, losses and deductions ...
  3. Income Tax

    A tax that governments impose on financial income generated by ...
  4. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  5. Partnership

    A business organization in which two or more individuals manage ...
  6. Crowding Out Effect

    An economic theory stipulating that rises in public sector spending ...
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