Tran et al., BBA audit regime affects buyers and sellers of partnership interests, The Tax Advisor (July 1, 2019)

According to The Tax Advisor, tax planners should consider the effects of the centralized partnership audit regime enacted as a component of the Bipartisan Budget Act of 2015. Despite the fact that audit procedural issues do not usually seem relevant when tax planners advise on the purchase/sale of a partnership interest, the audit regime should be analyzed for at least three reasons:

  • As governed by the default rule of the audit regime, “the IRS now has authority to determine, assess, and collect tax on partnership underpayments at the partnership level;”
  • A single individual, often the partnership representative, “has the exclusive authority to represent, negotiate, and bind the partnership at all stages of a partnership proceeding subject to the BBA audit regime;”
  • Partners “do not have a statutory right to notice or to participate in the partnership proceeding.”

Download the full article by clicking Tran et al., BBA audit regime affects buyers and sellers of partnership interests, The Tax Advisor (July 1, 2019).

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