IRS releases partnership audit regime proposed regulations
Published: 31 January 2017
The US Treasury and the Internal Revenue Service (IRS) have published proposed regulations (available via the Journal of Accountancy) regarding implementation of the new partnership audit regime included in the Bipartisan Budget Act of 2015.
The new regime would repeal the current rules governing partnership audits and replace them with a centralised partnership audit framework that, in general, assesses and collects tax at the partnership level. The proposed regulations provide rules for partnerships subject to the new regime, including procedures for electing out of the centralised partnership audit regime, filing administrative adjustment requests, and the determination of amounts owed by the partnership or its partners attributable to adjustments that arise out of an examination of a partnership.
The proposed regulations affect partnerships for taxable years beginning after 31 December 31 2017 and would have practical consequences for businesses and funds that are partnerships that file US tax returns. The Trump administration has placed a moratorium on all draft measures pending consideration by incoming heads of agencies, so it is not currently known whether these regulations will proceed.