NEW YORK (HedgeWorld.com)–HedgeTek, a partnership allocation and tax-reporting system used by fund managers and administrators, has been linked to Web-based GoSystem Tax RS so that users can file electronically Form 1065 and Schedule K-1 for hedge funds and other investment partnerships.
The combination allows straight-through tax processing without the need to retype information or manipulate spreadsheets, according to a statement from Edison, New Jersey-based Fi-Tek LLC and RIA, part of Thomson Corp., Stamford, Conn.–the suppliers of the two products.
The firms announced that Ernst & Young LLP intends to use the combined system for its hedge fund tax preparation work.
“Fi-Tek and RIA have greatly enhanced efficiency and decreased the possibility of errors in the complex hedge fund tax return preparation process by linking the products and automating a previously highly manual and labor intensive process,” said Fi-Tek chief Barry Mermelstein, in a statement.
The K-1 schedule, filed for investors in partnerships like hedge funds, recently was revised by the Internal Revenue Service after a government program to match partnership income to tax returns wrongly identified many taxpayers as having failed to report income.
IRS personnel were found to be more prone to make mistakes with paper K-1 forms than electronic filings, so electronic filing may reduce the problem. Vendors have been revamping their K-1 preparation products in line with the IRS attempt to enhance the accuracy of the matching program. (see ).
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