Proposed Regulations on New Partnership Audit Rules

    View Authors January 2017

    Before the inauguration of President Trump and in advance of the winter meeting of the American Bar Association’s Section of Taxation, the Treasury Department and Internal Revenue Service (IRS) released proposed regulations to implement the partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 and generally effective for taxable years beginning after 2017. On Inauguration Day, President Trump instructed that all regulations and proposed regulations submitted to the Federal Register and not yet published be withdrawn. Although the proposed regulations on the centralized partnership audit regime (Proposed Regulations) will not be published until the Trump Administration’s moratorium on regulations is lifted, they provide useful insight into the IRS’s thinking on the new partnership audit regime and may affect the drafting of partnership agreements.

    This publication highlights provisions of the 277-page notice of proposed rulemaking (NPRM) that may have significant planning implications for new partnerships and individuals and entities becoming partners in partnerships.

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