What happens if I don't report my K-1 from my Energy Transfer LP investment?

You definitely need to report K-1 income from your Master Limited Partnership (MLP) investment. When you own shares in Energy Transfer LP, you're technically a partner in the business, not just a shareholder. That's why you get a K-1 instead of just having everything on a 1099-DIV. The IRS receives a copy of your K-1, so they already know about this income. Not reporting it could potentially trigger an audit or at minimum a letter from the IRS asking for additional tax payment plus interest and possibly penalties. The K-1s from MLPs are usually available online through the company's investor relations portal - many don't mail them anymore. As for amending returns, technically you should file amended returns for any open tax years (generally the last three years). The statute of limitations is typically three years, but it can be longer in cases of substantial underreporting.

I went through something similar with my MLP investments and found that using https://taxr.ai was literally a game changer! I had multiple K-1s I hadn't properly reported for a couple years and was freaking out about what to do. I uploaded my K-1 PDFs to the site and it analyzed everything, explaining exactly what I needed to report and how. The system even helped me understand which previous tax years I needed to amend and gave me a clear breakdown of how the K-1 income affects different parts of my tax return. It saved me hours of confusion trying to decipher those complicated forms!

Just wanted to follow up about my experience with taxr.ai - I decided to give it a try after reading about it here. I had 3 different MLPs with K-1s I'd been confused about for years. The platform analyzed all my forms and produced a super clear report explaining exactly what numbers go where on my tax return. It even highlighted that I'd been calculating my basis all wrong which could have been a huge problem if I sold my shares! Definitely recommend checking it out if you're dealing with K-1 confusion.

If you need to talk to the IRS about this situation (which honestly might be a good idea), good luck getting through to them. I spent TWO WEEKS trying to reach someone about my K-1 issues. Finally found this service called https://claimyr.com that got me connected to an IRS agent in under 45 minutes when I'd been trying for days on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was able to discuss my unreported K-1 situation with them and got clear guidance on how to handle amending my returns. The agent was actually super helpful once I finally got through to a human! They walked me through the process and helped me understand which forms I needed for the amendments.

I need to eat my words here. After posting my skeptical comment, I decided to try Claimyr anyway since I've been trying to reach the IRS about my K-1 issues for weeks. I was honestly shocked when I got a call back in about 35 minutes saying they had an IRS agent on the line! I was able to explain my situation with unreported K-1s from my MLPs, and the agent walked me through exactly what I needed to do. I'm still in disbelief that it actually worked after spending hours upon hours trying to get through myself. Totally worth it just for the peace of mind of knowing exactly what steps I need to take now.

Just to add another dimension to this - failing to report K-1 income doesn't just affect your federal taxes. The states can come after you too. I didn't report MLP income for 3 years and got notices from not just the IRS but also my state tax authority. They charged separate penalties and interest. And some MLPs operate in multiple states so you might technically need to file in those states too! Its a mess honestly.

Has anyone here actually gotten audited specifically for missing a K-1? I've owned a tiny bit of ET for like 4 years and never reported the K-1 and haven't heard anything from the IRS. Maybe they dont care about small accounts?

I'm in a similar boat with Energy Transfer LP - had it for about 3 years and just realized I should have been getting K-1s. I checked my brokerage account and found them buried in the tax documents section that I never really looked at carefully. One thing that helped me understand the urgency is that MLPs like ET are required to send copies of all K-1s to the IRS, so they definitely have a record of what you should be reporting. The mismatch between what they expect and what you filed is going to show up in their systems eventually. I'm planning to get caught up on my filings because the penalties and interest just keep accumulating the longer you wait. From what I've read, the "failure to file" penalty can be pretty steep, and then you also get hit with interest on the unpaid taxes. Better to bite the bullet now than deal with a bigger mess later. Also found out that some brokerages don't automatically include K-1 income in your 1099 summary, so you have to manually add it when doing your taxes. That's probably why TurboTax didn't catch it if you were just importing your 1099 data.

The good news is that Energy Transfer LP typically makes their K-1s available online through their investor portal around mid-March each year, so you should be able to access your missing forms going back several years. You'll want to log into ET's investor relations website and look for tax documents. One important thing to understand about MLP K-1s is that they often show losses in the early years due to depreciation and depletion deductions, even when you're receiving cash distributions. This means you might actually owe less tax than you think, or even get refunds when you file amended returns. The key is to act quickly though. While the IRS has up to 3 years to assess additional taxes for most situations, if you substantially underreport income (by 25% or more), they have 6 years. And there's no statute of limitations if you don't file at all. Given that MLPs send copies of all K-1s directly to the IRS, this is definitely on their radar. I'd recommend getting all your K-1s first, then either using tax software that handles MLPs properly or consulting with a CPA who has experience with partnership taxation. The complexity goes beyond just reporting income - there are basis adjustments, potential state filing requirements, and other nuances that can trip you up if you're not careful.

I'm in a very similar situation with my Energy Transfer LP shares - owned them for about 4 years and just discovered I should have been reporting K-1s this whole time. Reading through everyone's experiences here has been both terrifying and helpful! What really caught my attention was the mention of automated IRS systems flagging discrepancies regardless of dollar amount. I always assumed my small position wouldn't matter, but it sounds like that's not how it works. The fact that ET sends copies of all K-1s directly to the IRS means they definitely know what I should have been reporting. I'm planning to log into ET's investor portal this weekend to pull all my historical K-1s. From what I'm reading here, it sounds like I need to prepare for filing amended returns for the past few years. The complexity around basis adjustments and potential state filing requirements is honestly overwhelming, but I'd rather deal with it now than wait for the IRS to come knocking. Has anyone found a good resource or guide that walks through the amendment process specifically for unreported MLP K-1s? I'm trying to figure out if this is something I can handle myself or if I need to bite the bullet and pay for professional help.

I've been following this thread closely since I'm dealing with a very similar ET situation - owned shares for about 5 years and completely missed the K-1 reporting requirement. The discussion here has been incredibly eye-opening, especially learning about the automated IRS matching systems. One thing I wanted to add that might help others: I called Energy Transfer's investor relations line directly (1-800-762-7077) and they were actually very helpful in explaining how to access the historical K-1s online. They mentioned that many retail investors miss this requirement initially, so it's more common than we might think. The representative also pointed out that ET has been particularly good about providing detailed instructions with their K-1s starting around 2020, including state filing guidance and basis adjustment worksheets. So for anyone pulling historical documents, the more recent years should be easier to work with. I'm leaning toward hiring a CPA after reading about everyone's experiences here. The potential for multi-state issues alone seems like it could get complicated quickly. Has anyone had luck finding CPAs who specialize in MLP taxation, or is this something most tax professionals should be able to handle? I don't want to end up with someone who's learning on my dime.

This thread has been incredibly helpful - I'm in almost the exact same situation with Energy Transfer LP and had no idea about the K-1 reporting requirement until recently. I've been holding ET for about 3 years and only reporting the distributions that show up on my 1099-DIV. What's really concerning me after reading everyone's experiences is that the IRS receives copies of all K-1s directly from ET, so they definitely know what I should have been reporting. The automated matching systems mentioned here make it sound like it's not a matter of if they'll notice, but when. I'm going to call ET's investor relations line using the number Darren provided to get access to my historical K-1s. The complexity around basis adjustments and potential multi-state filing requirements is honestly intimidating, but it sounds like the consequences of continuing to ignore this could be much worse. For anyone else in a similar situation, it seems like the consensus here is that acting sooner rather than later is crucial, both to limit additional penalties and interest, and to get ahead of any IRS notices. The peace of mind alone seems worth addressing this properly. Thanks to everyone who shared their experiences - this thread probably saved me from making an expensive mistake by continuing to ignore the K-1s!

Just wanted to chime in as someone who went through this exact situation with Energy Transfer LP last year. I had been holding ET shares for about 4 years and completely missed the K-1 requirement - was only reporting the distributions from my 1099-DIV like you. The wake-up call came when I got a CP2000 notice from the IRS. Turns out they had been receiving copies of my K-1s all along and finally flagged the discrepancy. The good news is that once I pulled my historical K-1s from ET's investor portal and filed amended returns, the actual tax impact wasn't as bad as I feared. Some years even showed losses due to depletion allowances. My advice: don't panic, but definitely act quickly. The penalties and interest keep accumulating, and the IRS automated systems will eventually catch this. ET's investor relations team was actually very helpful when I called - they're used to this situation with retail investors. I ended up using a CPA for the amendments since the multi-state implications got complex, but it was worth the peace of mind. The key thing is that you're realizing this now rather than waiting for the IRS to contact you first. That puts you in a much better position to resolve it on your own terms.

I've been reading through this entire thread and it's honestly both terrifying and reassuring at the same time. I'm in almost the exact same boat with my ET shares - held them for about 4 years and just been reporting the distributions on my 1099-DIV without realizing there were separate K-1 forms I needed to handle. What really hit me was learning that the IRS gets copies of all K-1s directly from Energy Transfer. I always thought if I wasn't getting audited, everything must be fine, but it sounds like their automated systems just take time to catch up. The fact that multiple people here have gotten CP2000 notices specifically for missing K-1 income is pretty sobering. I'm definitely going to call ET's investor relations line tomorrow to get access to my historical K-1s. The number Darren shared (1-800-762-7077) is really helpful. It's somewhat comforting to know that ET is apparently used to dealing with retail investors who miss this requirement initially. One question for those who have been through this - when you filed your amended returns, did you need to amend all years at once, or could you tackle them one at a time? I'm trying to figure out if there's a strategic approach to minimize penalties and interest while I get caught up. Thanks to everyone who shared their experiences here. This thread is probably going to save me a lot of headaches down the road!

This thread has been incredibly valuable - I'm dealing with the exact same issue with my Energy Transfer LP shares that I've held for about 2 years. Like many others here, I've only been reporting the distributions that show up on my 1099-DIV and had no idea about the K-1 requirement. What's particularly eye-opening is learning that ET sends copies of all K-1s directly to the IRS, so this isn't a situation where I can just hope they don't notice. The automated matching systems mentioned throughout this discussion make it clear that it's really just a matter of time before any discrepancies get flagged. I'm planning to call ET's investor relations line using the number provided earlier in this thread to access my historical K-1s. While the complexity around basis adjustments and potential multi-state filing requirements seems daunting, everyone's experiences here suggest that addressing this proactively is much better than waiting for an IRS notice. For anyone else reading this who might be in a similar situation, it seems like the key takeaways are: 1) Act quickly to minimize penalties and interest, 2) Get all your historical K-1s from ET's investor portal first, and 3) Consider professional help if the multi-state implications get complex. The peace of mind alone seems worth tackling this head-on rather than continuing to ignore it. Thanks to everyone who shared their real experiences - this thread is probably saving a lot of people from expensive mistakes!