In 2021, the IRS introduced Schedules K-2 and K-3 to Form 1065 used by partnerships. These schedules report foreign income earned by the partnership in the tax year, and are in excess of 20 pages in length for Schedules K-2 and 20 pages for each partner's K-3. However, the reporting required by most investment clubs involved only a few fields on these schedules.

For 2022, the IRS allows partnerships to opt out of Schedules K-2 and K-3 if four conditions are fully met:

1. The partnership has no or limited foreign activity.
   • If there is activity, it must be passive (such as investment income).
   • Taxes paid (or withheld) and/or accrued must be less than $300.
   • A payee statement (such as a brokerage firm's Form 1099) must be received.
2. The partnership's partners are restricted to the following:
   • U.S or resident alien individuals.
   • Domestic trusts (grantor or non-grantor).
   • Domestic estates of deceased persons.
   • Not a foreign estate or trust.
   • Not a foreign individual (an individual who does not have resident alien status).
3. All partners must be notified the partnership intends to exclude Schedule K-3 from its Form 1065 filing no later than when a club furnishes schedule K-1 to partners.
4. No partner requests a Schedule K-3 before one month prior to the club filing form 1065.

If a club meets the above criteria, a club administrator may use the notification system in the club's myICLUB.com website to notify members of its intent to not file Schedules K-2 and K-3. This tool is available in the Taxes tab of the club's website.

If a member does request a Schedule K-3 (for instance, if they have a significant amount of foreign income to report on their personal return), then the myICLUB.com Club Tax Printer can generate a K-3 for that partner only as well as the Schedule K-2 for the club return.