New IRS Partnership Audit Regulations: What Every Tax Adviser Needs to Know

Among the most far-reaching aspects of the Bipartisan Budget Act of 2015, signed into law Nov. 2, 2015, is a significant change to the way the IRS audits partnerships. The new rules will replace the current TEFRA rules and allow the IRS to audit partnerships at the entity level and assess and collect taxes against the partnership, unless the partnership elects out of the new regime. The new legislation will impact the formation and operations of partnerships, as well as disposition of partnership interests and admission of new partners.

The new regulations are designed to facilitate IRS audits of partnerships, which will lead to more frequent examinations, and completely overhauls the IRS’ approach to partnership examinations. The new audit approach will have significant effects on tax planning for tax advisers serving partnerships and partners. Key issues will include allocations for minority/limited partners, and determining which party will bear the cost of taxes imposed at the partnership level.

The law applies to all partnerships, although some partnerships may be able to elect out. While the rules do not go into effect until 2018, tax advisers should evaluate existing partnership structures now to prepare clients for the tax planning and compliance impact of the new regulations. Moreover, partnerships may elect to apply the new rules starting in 2015.

Listen as our expert panel provides a critical first look at the impact of this far-reaching legislation. The panel will offer insights on how to address the changes brought about by the new audit processes and detail the tax planning and partnership operation concerns arising from the legislation.

1. Detailed discussion of new audit rules
2. Tax planning implications advisers must evaluate in anticipation of new audit procedures
3. Alternatives 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 and new partners

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

• How the entity-level change facilitates IRS audits
• Elimination of concept of “tax matters partner” and requirement of “tax representative” with authority to represent the partnership in an audit
• Commercial and transactional issues arising from the new law, including indemnification, collection and tax reserves
• Electing in or out of the new rules

Learning Objectives

After completing this course, you will have an understanding of the scope of the IRS’ changes to its partnership audit process arising from the Bipartisan Budget Act of 2015. You will be able to identify critical concerns in current partnership structures, and you will have concrete and specific guidance on tax planning issues that will accompany the new regulations. You will also know the various elections available to avoid entity-level tax treatment.

• 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: Basic knowledge of taxation.

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IRS Approved Provider

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