On June 07, 2016, Jerald David August, Partner at Kostelanetz & Fink LLP. presented, "The TEFRA Partnership Audit Rules Repeal: Partnership and Partner Impacts" on an ALI-CLE Webcast.
The TEFRA Partnership Audit Rules were repealed by Congress and replaced with new partnership audit rules affecting all partnerships. The new rules make wide-sweeping reforms in the audit of partnerships and LLCs. While the new rules generally are not effective until 2018, current drafters of partnership and LLC agreements should be drafting audit provisions that will work under these rules. Are you prepared to implement practices and advise clients on what they will be liable for under this regime?
This program discussed the repeal of the TEFRA Partnership Audit Rules, including electing large partnership rules, enacted under the Bipartisan Budget Act of 2015 (“BBA”) and its impact on partners in partnerships. Topics of discussion included:
- Liability under the BBA for federal taxes in adjustment years attributable to tax underpayments in reviewed years
- Working within the complexities of the imputed underpayment definition
- Discussion of the applicable implementation date
- Strategies for advising clients on how to comply with new rules and considerations for “electing-in” early
- Application to partners of multi-tiered partnerships
- Avoiding the new rules: when is it an option and what is the impact at the partnership level and on the individual partner level
- Drafting current LLC and partnership agreements taking these rules into account