IRS Partnership Audit Rules for Tax Counsel: Managing Partnership Operations and Governance

The partnership audit rules allow the IRS to audit partnerships at the entity level and assess and collect taxes against the partnership unless it elects out of the regime. This impacts the formation and operations of partnerships, as well as the disposition of partnership interests and the admission of new partners.

The rules are designed to facilitate IRS audits of partnerships, thus leading to more audit frequency, and completely overhauled the Service's approach to partnership examinations. The audit rules have a significant effect on the drafting of partnership agreements and purchase agreements. Tax counsel will have to consider issues such as protection of minority partners, specifying which party will bear the cost of taxes imposed at the partnership level and indemnities for pre-closing taxes.

The rules address several procedural and substantive tax issues. Tax counsel should evaluate existing partnership agreements to prepare clients for the commercial, operational, and compliance impact of the audit rules, as well as incorporating the law's provisions for all new partnership agreements, purchase agreements, and agreements in connection with the winding up of a partnership.

Listen as our expert panel provides a critical analysis of the impact of the partnership audit rules. The panel will offer insights on how to address the changes brought about by the audit processes and detail the commercial and operation concerns arising from the audit rules.

1. A detailed discussion of the partnership audit rules
2. Drafting and modifications required for existing partnership agreements
3. Alternate procedures for partnerships seeking to opt-out of entity-level assessments
4. Impact on transfers of partnership interests and admission of new partners
5. Procedural protections for minority partners

The panel will review these and other critical issues concerning the IRS partnership audit processes:

• How the entity-level change facilitates IRS audits
• Role of the "tax representative" and "designated individual" with respect to audit
• Commercial and transitional issues
• Drafting and amending partnership agreements and purchase agreements

Learning Objectives

After completing this course, you will be able to:

• Identify the partnership audit rules
• Discern modifications required for existing partnership agreements
• Determine alternatives for partnership op-outs of entity-level assessments
• Ascertain procedural protections available to minority partners

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization with supervisory authority over other preparers/accountants in preparing complex tax forms and schedules and preparing for partnership audits. Specific knowledge and understanding of partnership structures and operating agreements and IRS partnership audits. Familiarity with new partnership audit rules under the Bipartisan Budget Act of 2015.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).