Beginning in 2018, The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) was repealed and replaced with a new partnership audit regime in which taxes and penalties due as a result of a partnership audit are assessed at the partnership level, rather than individually at the partner level. Some small partnerships (100 or fewer eligible partners) may have the option to elect out. The IRS has issued regulations to assist taxpayers in implementing these new rules.
- Many partnerships and limited liability companies will find it necessary or desirable to amend their partnership or operating agreement in response to the new rules. The familiar role of “tax matters partner” is replaced by a new, more comprehensive role of “partnership representative,” who is not required to be a partner. The partnership […]