Washington, D.C. (January 4, 2018) – The American Institute of CPAs (AICPA) today renewed the request it made to Congress in June 2017 that lawmakers enact legislation to delay by one year the effective date of the new “Centralized Partnership Audit Regime” (Regime) created as part of the Bipartisan Budget Act of 2015. The new Regime replaced existing procedures used by the IRS for over 30 years to audit partnerships.
The AICPA noted in its letter (attached or URL inserted) that “Treasury and the IRS have not provided all of the necessary procedures and guidance for taxpayers to make informed decisions,” even though the effective date has now passed. The effective date was December 31, 2017 and the AICPA asked that it be extended to December 31, 2018. Congress should authorize the IRS to continue to audit partnerships using the existing procedures during the delay period, the AICPA letter stated.
The new Regime represents a significant departure from previous law and will require a substantial effort on the part of Treasury, the Internal Revenue Service, the tax practitioner community and the affected taxpayers to develop and comply with new rules, regulations and procedures to establish a fair, equitable and administrable Regime, the AICPA wrote.
The AICPA summarized the reasons that it asked for a delayed effective date in its June 13, 2017 letter:
- The regulations have not been issued or contain significant gaps;
- Proposed technical corrections would clarify and modify elements of the “Centralized Partnership Audit Regime;”
- The impact on financial reporting standards remains unclear;
- Partnerships need to amend or draft their partnership agreements; and
- The impact on state tax law remains uncertain.