Navigating the Partnership Audit Proposed Regulations: A Bumpy Ride
On June 14, 2017, proposed regulations were published regarding implementation of the centralized partnership audit regime contained in section 1101 of the Bipartisan Budget Act of 2015 (the centralized audit regime). The centralized audit regime was intended by Congress to streamline the process by which the IRS can audit partnership tax returns and collect any resulting tax liabilities.
The proposed regulations provide a framework for the implementation of the centralized audit regime and detail how partnership audits will be conducted under the regime. This special report examines certain elements of the proposed regulations that could result in significant tax consequences for taxpayers who are partners in partnerships.