State Responses to the BBA Audit Regime: The MTC Model, Conforming and Nonconforming States

This webinar will review the federal process for Bipartisan Budget Act (BBA) audits and adjustments and identify state responses to the Act. Our panel of seasoned SALT professionals will discuss how practitioners and partners are affected by state compliance rules for reporting and remitting audit adjustments and provide examples of the impact of state BBA legislation in specific states.

Beginning in 2018, the BBA dramatically altered the partnership audit process. Partnerships and their advisers continue to struggle with the complexities of these partnership-level audits under federal law. Add to this the lack of state uniformity in adopting the federal guidelines, multistate and multi-tier partnerships, and the prospect of a BBA audit can be overwhelming for partnerships and tax professionals. 

In line with its efforts "to promote uniform and consistent tax policy and administration among the states," the Multistate Commission (MTC) has issued model statutes and regulations advocating for consistent treatment of BBA audit adjustments at the state level. However, most states have not adopted the BBA model. Of the states adopting the guidelines, many have done so with modifications. Georgia, for example, adopted the MTC guidelines; however, it pushes out the adjustment for additional tax liability, penalties, and interest to the partners, whereas the MTC model stipulates that the partnership pays the additional liability. SALT professionals and partners need to understand the nuances of state responses to the BBA audit rules.

Listen as our panel of astute SALT advisers discusses SALT considerations of BBA audits and points out striking differences in how states handle the relative necessary adjustments.