As result of the Bipartisan Budget Act (BBA) of 2015, Congress enhanced the IRS’s ability to audit partnerships. The changes are expected to dramatically increase the audit rates for partnerships and will require partners to review and possibly revise their operating agreements. The new rules generally apply to partnership returns filed after 2018 and careful planning will help mitigate any unfavorable consequences resulting from these changes. This page provides information that will assist CPAs in helping their clients with these new rules.
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Checklists, Practice Guides and Templates
- Letter to Advise Clients on Partnership Audit Changes: Use this template letter to inform your partnership clients about the changes and advise them to contact you for additional guidance.
- State Conformity to Federal Partnership Audit Rules: States are starting to consider implementing their own rules, causing variances across the nation. This resource addresses which states have worked on legislation to conform to the federal changes.
Videos, Webcast Archives and Other Media
- Partnership Taxation and Representation: What Tax Professionals Need to Know, Aug. 2017: Learn about the considerations for designating a partnership representative.
- Washington Tax Brief, Jan. 2017: Discusses multiple issues including new partnership audit rules. Download the slides.
- Partnership Audit Changes, Feb. 2016: This short video provides helpful information to help practitioners understand the new rules and advise clients.
- New Partnership Audit Rules: Game-Changing Legislation, Dec. 2016: Learn about the impact the new rules may have on partners/partnerships and issues that may be raised under existing partnership agreements.
- Final regs. govern who can be a partnership representative, The Tax Adviser, Aug. 2018
- IRS withdraws partnership regs on disguised sales, The Tax Adviser, Sept. 2018
- IRS issues final regs. on electing out of centralized partnership audit regime, The Tax Adviser, July 2018
- Proposed regs. would govern partnership audit adjustments, The Tax Adviser, May 2018
- Guidance addresses partnership accounting when IRS collects underpayments, The Tax Adviser, March 2018
- Centralized partnership audit rules are reissued in proposed form, The Tax Adviser, June 2017
- Partnership tax audits: the new rules, Tax Section News, May 2017
- State challenges with the new partnership audit rules, The Tax Adviser, March 2017
The AICPA is actively advocating for the profession on this issue and has submitted the following comment letters:
- AICPA Comments on the Centralized Partnership Audit Regime
- AICPA Request for Delay of Effective Date of BBA Partnership Audit Provisions
- Testimony on Centralized Partnership Audit Regime
- AICPA Comment Letter on Centralized Partnership Audit Regime
- Request for Delay in Effective Date on Partnership Audit Provisions
- Letter on Technical Corrections Act of 2016
- Position Paper on State Conformity to Federal Partnership Audit Rules
Visit our tax advocacy pages to keep up to date on continuing advocacy efforts.
- Final Regulations – Partnership Representative Under the Centralized Partnership Audit Regime and Election to Apply the Centralized Partnership Audit Regime
- Proposed Regulations – Centralized Partnership Audit Regime: Adjusting Tax Attributes
- Final Regulations – Election Out of the Centralized Partnership Audit Regime
- Proposed Regulations – Centralized Partnership Audit Regime: Rules for Election Under Sections 6226 and 6227, Including Rules for Tiered Partnership Structures and Administrative and Procedural Provisions
- Proposed Regulations – Centralized Partnership Audit Regime: International Tax Rules
- Proposed Regulations – Centralized Partnership Audit Regime
- Multistate Tax Commission Partnership Project: Project is intended to address questions on whether new state statutes are called for and what more states should be doing to audit and track partnership income.
- Temporary Regulations on Electing into the BBA Early
- Advanced Tax Strategies for LLCs and Partnerships: Learn the pros and cons of the LLC, general partnership, limited partnership and limited liability partnership by focusing on planning and potential tax traps (10.5 CPE credits).
- Advanced Taxation Partnerships and LLCs: Learn about planning opportunities for partnerships as well as issues the members and partners face if they do not have a solid plan to minimize their exposure (9 CPE credits).
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Reviewed September 9, 2018