The proposed regulations implementing the new centralized partnership audit regime under the Bipartisan Budget Act of 2015 (BBA) have finally been released. The BBA regime replaces the current TEFRA (Tax Equity and Fiscal Responsibility Act of 1982) procedures beginning in 2018. The proposed regulations were originally issued on January 19 of this year but were covered by a January 20 White House regulatory freeze. The newly released proposed regulations contain several modifications.
CCH notes the following:
The proposed regulations provide rules for partnerships subject to the new regime, including procedures for electing out of the centralized partnership audit regime, filing administrative adjustment requests, and determining amounts owed by the partnership or its partners attributable to adjustments that arise out of an examination of a partnership. The proposed regulations also address the scope of the centralized partnership audit regime and provide definitions and special rules, including the designation of a partnership representative. The proposed regulations affect partnerships for tax years beginning after December 31, 2017, and any partnerships that elect application of the centralized partnership audit regime for tax years beginning after November 2, 2015, and before January 1, 2018. The proposed rules regarding the conversion of partnership items related to listed transaction provided in NPRM REG-138326-07 (February 13, 2009) are withdrawn.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.