Schedules K-2 and K-3 provide more clarity concerning items of international tax relevance that pass through partnerships and S corporations to partners and shareholders. Schedules K-2 and K-3 replace and clarify the reporting of certain amounts formerly reported on Schedules K and K-1 of Form 1065, U.S. Return of Partnership Income, and Form 1120-S, U.S. Income Tax Return for an S Corporation. The forms essentially replace the statements, supplemental schedules, and footnotes used in the past to report and provide partners and shareholders the information necessary to complete their returns concerning international tax provisions. This course covers filing requirements and exceptions, the activity reported on each part of the schedules, and penalties. The Schedules K-2 and K-3 issued for Form 8865, which must be filed by certain U.S. persons who own an interest in a foreign partnership, are not covered.