Proposed Partnership Audit Regulations are Out
In a 270 page blockbuster release, the IRS laid down the law on the new partnership audit tax regime in proposed reg project REG-136118-15. As a background, Congress repealed TEFRA and replaced it with the Bipartisan Budget Act of 2015 (BBA). The BBA was enacted in a rush and was later followed by the Tax Technical Corrections Act of 2016 (H.R. 6439, S. 3506) which never passed. The main highlight of the new rules is that partnerships could end up liable for the assessed tax as compared to the TEFRA rules where the tax liability passed to the individual partners. One of the key...
January 19, 2017 read more
Repeal of TEFRA and Electing Large Partnership Rules
The Bipartisan Budget Act of 2015 (H.R. 1314) was just signed by President Obama. Basically the law repeals the so-called TEFRA and “electing large partnership” audit rules and replaces them with a new unified audit and assessment regime. TEFRA language is prevalent in every investment fund agreement. Generally you will see it in the tax matters partner section. The language addresses the rights and obligations of the TMP and the investors in case of an audit. Sometimes a fund would not be covered under TEFRA if it has less than 100 partners, but in most instances it would be...
November 04, 2015 read more