The New Partnership Audit Rules: Electing Out

This is the first of two articles discussing the practical implications to partners and partnerships of the new partnership audit rules under the Internal Revenue Code and the related proposed and final Treasury regulations.

On Nov. 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015, which included a new federal audit regime for partnerships and entities classified as partnerships for tax purposes. The new rules, effective for audits of partnership tax years beginning on or after Jan. 1, 2018, generally allow the IRS to adjust items of income, gain, loss, deduction or credit of a partnership, and collect any resulting underpayment of tax, at the partnership level.

To read the full article, please click below.