New IRS Partnership Audit Rules: Do you have a partnership representative?
6/5/2018Articles & Podcasts
Every partnership will be impacted by the new partnership audit rules that are in effect for tax years beginning January 1, 2018. Your partnership needs to be prepared for the new rules, which are considerably different from the previous audit procedures.
We strongly recommend that each entity taxed as a partnership revise its partnership agreement to address the new rules as well as appoint a partnership representative (PR). The PR has the sole authority to bind the partnership and all partners on any decision in an audit proceeding. The responsibilities of a PR are much more significant than a tax matters partner under the previous audit procedures. If a PR is not appointed, the IRS will appoint a PR on behalf of the partnership.
Navigating the new partnership audit rules can be complex. It is recommended that you consult your tax advisor to discuss these rules and how they may impact your partnership. Please contact Jonathan B. Farrell, CPA at 781-937-5373 / firstname.lastname@example.org.