The new rules generally apply to partnership returns filed after 2018, but careful planning today will help mitigate any unfavorable consequence.
Particularly, the new term “partnership representative” replaces the prior “tax matters partner.” The partnership representative is critical; they will act as the single point of contact between the IRS and the partnership and will have full authority to bind the partnership and the partners during an audit.
Certain partnerships with 100 or fewer partners may elect out of the provisions. However, this “opt-out” election is not currently available to a partnership with a trust, partnership, or disregarded entity as a partner. Therefore many “small” partnerships may be subject to the new rules and unable to opt out. BST can help you determine, when eligible, whether exercising this option would be beneficial to your situation.
Please contact BST partner, James Cole, CPA if you would like to receive additional information or discuss these new partnership audit changes considering your particular circumstances.
Copyright 2017, BST & Co. LLP
Posted on December 5, 2017 at 9:24 AM