Hedge Funds and IRS Partnership Audit Rules

The IRS partnership audit regulations present significant issues and risks for hedge funds and other private investment fund partnerships. Tax counsel advising private fund partnerships need to fully grasp the importance of the new regulations, both in structuring new funds and modifying existing partnerships.

A significant challenge facing fund partnerships and their advisers is addressing the competing tax preferences of different types of fund investors, including U.S. taxable, U.S. tax-exempt, U.S. government, non-U.S. taxable, non-U.S. pension funds, and non-U.S. sovereign investors. Fund structures can include different approaches to using “blockers” and feeder funds to address these various interests and minimize U.S. taxes.

This webinar is designed to provide a thorough guide to structuring hedge funds and other private investment fund partnership structures in light of the new regulations. The event will address formation issues under the IRS partnership audit regime, detailing the changes in partner taxation approach and available elections, and will discuss possible changes to existing fund partnership structures.

Listen as our authoritative panel of practitioners provides a practical update to the challenges of structuring hedge fund and private investment fund partnerships under the new IRS partnership audit rules.

1. Balancing competing tax objectives of investors in structuring private investment funds
   1. Tax objectives of taxable U.S. investors
   2. Tax objectives of non-taxable U.S. investors (pension plans, endowments, other tax-exempt investors and governmental entities)
   3. Tax objectives on non-U.S. investors
   4. Tax objectives of sovereign investors
2. Tax objectives of fund managers
3. Fund structuring issues and options
4. Structuring new private investment funds in light of the new partnership audit regulations
5. Elections and steps tax counsel should consider now to protect existing hedge funds and private investment partnership funds

The panel will review these and other critical issues:

• Structuring considerations to balance competing tax preferences of major private fund investors
• How can the use of blockers and feeder funds accommodate the needs of particular investors?
• What changes will the IRS partnership audit regulations bring to structuring new hedge fund and private investment fund partnerships?
• What elections and other steps should tax counsel be considering now for existing private investment fund partnerships to avoid negative tax and operational consequences?
• What challenges do sovereign investors face in retaining their status as Section 892 investors?

Learning Objectives

After completing this course, you will be able to:

• Identify provisions of the partnership audit rules that will specifically impact hedge fund and private investment fund partnerships
• Determine how to structure private equity and other types of funds in light of the new partnership audit rules
• Recognize the various factors, such as type of investor, type of fund and location of fund, in structuring fund partnerships
• Decide what elections, restructuring and other steps may be necessary to protect existing fund structures from negative consequences in the new audit rules

• 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).