Is the IRS providing any additional exceptions for tax year 2021

Yes, the IRS is providing an additional exception for tax year 2021 to the filing requirements for Schedules K-2 and K-3 for certain domestic partnerships and S corporations.

To qualify for this exception, the following conditions must be met:

1. In tax year 2021, the direct partners in the domestic partnership are not foreign partnerships, foreign corporations, foreign individuals, foreign estates, or foreign trusts.
2. In tax year 2021, the domestic partnership or S corporation has no foreign activity, including foreign taxes paid or accrued or ownership of assets that generate, have generated, or may reasonably be expected to generate foreign source income.
3. In tax year 2020, the domestic partnership or S corporation did not provide to its partners or shareholders, nor did the partners or shareholders request, information regarding certain lines on Form 1065, Schedules K and K-1, and Form 1120-S.
4. The domestic partnership or S corporation has no knowledge that the partners or shareholders are requesting such information for tax year 2021.

If these conditions are met, the domestic partnership or S corporation does not need to file Schedules K-2 and K-3 with the IRS or with its partners or shareholders. However, if a partner or shareholder subsequently notifies the partnership or S corporation that they need the information contained on Schedule K-3 to complete their tax return, the partnership or S corporation must provide the information to the partner or shareholder. If a partner or shareholder notifies the partnership or S corporation before the partnership or S corporation files its return, the conditions for the exception are not met, and the partnership or S corporation must provide the Schedule K-3 to the partner or shareholder and file the Schedules K-2 and K-3 with the IRS.

Sources:
Notice 2021-21
Relief Provided From Various Tax Year 2019-2020 Penalties
Notice 2024-7
Notice 2023-21
Notice 2020-15
Final Regs Issued on Amounts Eligible for Look-Through Exception