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Unit holders of MLPs receive a schedule K-1 form to use in tax filing. Often these partnerships operate in many states, and you'll also receive a state specific k-1 form.

For example, Enterprise Product Partners operates in 41 states.

You are expected to file a non-resident tax return for each of those states where your income from the partnership exceeds the minimum filing threshold.

So my question is:

  • Does the company report information to the state governments that would make them aware that you are a unit holder and have a tax obligation? e.g. Supplying a list of all unit holders to the state
  • Same question, but for Federal
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You can be reasonably confident that if you are receiving a tax form from any entity that a copy of that tax form has also been sent to the IRS and to any relevant state tax authorities. So yes, the IRS and the various states are aware of who received the K-1 forms.

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