Form 1065 must be filed electronically if the number of partners exceeds:

Form 1065, which is used for reporting the income, deductions, gains, losses, and other information of partnerships, must be filed electronically when the number of partners in the partnership exceeds 100. This requirement promotes efficiency and accuracy in processing tax returns, allowing the IRS to handle large volumes of information more effectively.

The rationale behind this threshold is tied to the administrative goals of the IRS and the need for effective data management systems. By requiring electronic filing for larger partnerships, the IRS can ensure that the information is submitted in a standardized format that is easier to analyze and process. This helps improve compliance and reduce errors that can occur with paper filings, which tend to be more error-prone due to manual entry and paper handling.

Understanding the requirement for electronic filing is crucial for partnerships with multiple partners to stay compliant and avoid penalties.