Tax Law Insights

The Bipartisan Budget Act of 2015 enacted sweeping changes to the federal audit regime for entities taxed as partnerships.  The new audit rules became effective for tax years beginning on or after January 1, 2018.

For tax years beginning before January 1, 2018, partnerships are audited using one of three different procedures (unless the partnership makes an affirmative election to be governed by the new partnership audit rules effective for tax years beginning before January 1, 2018).  These procedures are:

a. Partnerships with 10 or fewer partners: The Internal Revenue Service ...