Early election of new partnership audit rules
Should your business make an early election in 2017?
The new partnership audit rules were enacted as part of the Bipartisan Budget Act of 2015 and are effective for partnership tax years beginning on or after Jan. 1, 2018. The new rules replace the unified partnership audit rules under The Tax Equity and Fiscal Responsibility Act of 1982 (also referred to as TEFRA). Partnerships that have received notification of an IRS audit for tax years ending on or before Dec. 31, 2017, have the option to early-elect application of the rules to the IRS examination of the partnership.
The decision to early-elect the new rules to an IRS examination is complex and is time sensitive (30 days from the notice of selection for examination.) The Tax Matters Partner should discuss this decision with partnership managers and tax advisors. In this short discussion—a breakout of our Tax controversy update: Hot topics for 2017 webcast—we share some important perspectives for partnerships that may be considering early election related to a potential IRS examination for tax years prior to the effective date of the new partnership audit rules.
you may also be interested in
Join us for an informative webcast as we discuss what you can do now to prepare for changes in partnership audit rules in 2018.
Proposed regulations would implement most aspects of the new audit regime, some issues were reserved on pending likely legislative changes.
Congressional leaders agree to make the new partnership audit rules more user-friendly. Push out will be available for tiered partnerships.
Eligible taxpayers may elect into the new regime after receiving notification of an IRS examination or deciding to file an AAR.
Understand issues the IRS will face in implementing the new partnership audit rules and explore how the issues could be resolved.
Newly enacted tax rules will change the way partnerships are audited by the IRS.