By Megan L. Brackney
Journal of Passthrough Entities
January - February 2017 Edition
Under the new Bipartisan Budget Act of 2015 (the “BBA”), there are significant changes to the partnership audit rules. Like TEFRA, the BBA requires partnership-level resolution of partnership income, gain, loss, deduction, and credits. Unlike TEFRA, under the BBA, the IRS will assess tax at the partnership level (as opposed to the partner level) based on an imputed underpayment amount at the highest applicable federal tax rate, subject to some key exceptions. The BBA also contains numerous changes to the procedures for assessment and collection of tax, and for judicial review.