Electing large partnerships may be able to claim a credit for federal telephone excise tax billed from March of 2003 through July of 2006. See the instructions for line 27 of Part I and Form 8913, Credit for Federal Telephone Excise Tax Paid, for more information.

The Tax Increase Prevention and Reconciliation Act of 2005 requires that a corporate partner's distributive share of interest income, interest expense, and partnership liabilities be treated as income, expense, and liabilities of the corporation for purposes of the limitation on the deduction for interest under section 163(j). Codes R1 and R2 of Schedule K-1 will be used to report interest income and interest expense as information items for this purpose. See the instructions for line 15 of Schedule K (item 17) for details.

The Tax Increase Prevention and Reconciliation Act of 2005 modified the way that an employer's W-2 wages are determined when calculating the domestic production activities deduction. The modification applies to tax years beginning after May 17, 2006. For more information, see Form 8903, Domestic Production Activities Deduction, and the instructions for line 15 of Schedule K (item 18).

The Energy Policy Act of 2005 provides for a new credit relating to the manufacture and production of certain qualified energy efficient dishwashers, clothes washers, and refrigerators. For more information, see new Form 8909, Energy Efficient Appliance Credit, and the instructions for line 10 of Schedule K.

The Pension Protection Act of 2006 provides that qualified conservation contributions of agricultural or livestock production property made after May 17, 2006 by certain electing large partnerships may qualify for an increased deduction. For more information, see Conservation contributions of agricultural or livestock production property on page 19.

For tax years ending in 2006 and later, the nonconventional source fuel credit is one of the “general credits” reported on line 10 of Schedule K. The nonconventional source fuel credit is no longer reported separately on line 13 of Schedule K.

Certain partnerships are required to file Schedule M-3 instead of Schedule M-1. See the instructions for Schedule M-3 (Form 1065) for details.

Cash contributions made in tax years beginning after August 17, 2006, must be supported by a dated bank record or receipt. See Pub. 526, Charitable Contributions, for more information.

The deduction for contributions of certain food inventory has been extended through December 31, 2007. See the instructions for Part II, line 9.

For contributions made after July 25, 2006, new rules and restrictions apply to certain contributions of real property located in a registered historic district. For contributions made after August 17, 2006, in general, no deduction is allowed for structures or land, only buildings, and the charitable deduction may be reduced if rehabilitation credits were claimed for the building. For contributions made after February 12, 2007, a $500 filing fee may apply to certain deductions over $10,000. See sections 170(h)(4)(B), 170(h)(4)(C), 170(f)(13), and 170(f)(14).

Certain employers can claim a new mine rescue team training credit. See Form 8923, Mine Rescue Team Training Credit.

This is the first year that electing large partnerships are permitted to file their return electronically. At this time, it is not a requirement that they file electronically. See page 3 for more details.

Starting in 2007, you can e-file Form 1065-B and e-pay the balance due in a single step by authorizing an electronic funds withdrawal from your bank account while filing. For more information, see Form 8879-B, IRS e-file Signature Authorization for Form 1065-B.