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New Partnership Audit Rules under the Bipartisan Budget Act of 2015

(80 reviews)

Produced on November 10, 2016

$ 59 Tax Law and Business, Corporate, & Securities Law In Stock
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Course Information

Time 62 minutes
Difficulty Intermediate

Course Description

In November 2015 Congress enacted new audit rules for partnership tax returns. The rules depart significantly from the current rules in effect since enactment of the Tax Equity and Fiscal Responsibility Tax Act of 1982 ("TEFRA"), by, among other things, providing for increased centralization of audits at the partnership level and creating a new mechanism for partnership-level payment of additional tax owed.  

The new audit rules will generally be effective only for partnership taxable years beginning after December 31, 2017. There is significant uncertainty as to how the audit rules will work, and the time before the effective date should give Congress and Treasury time to provide additional guidance in the form of technical corrections and regulations. However, attorneys drafting partnership agreements need to know about the rules now, to ensure that such agreements have provisions that properly account for future audits. In particular, the new rules provide for multiple elections, and drafters should consider who has the authority to make the elections and which choices should be made. 


Learning Objectives:
  1. Review the basics of the audit rules under TEFRA and learn how the new audit rules depart from TEFRA
  2. Understand the different elections under the new audit rules
  3. Determine how to draft provisions in partnership agreements in anticipation of the new audit rules
  4. Contemplate the uncertainties surrounding the new audit rules

Credit Information

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Faculty

Vivek Chandrasekhar

Roberts and Holland LLP

VIVEK A. CHANDRASEKHAR received his B.A. with highest honors from Indiana University in 2006, and his J.D. magna cum laude from New York University in 2011, where he received the Order of the Coif and was a Managing Editor of the Law Review. From 2012-2013, he was a law clerk to the Honorable Rosemary S. Pooler, United States Court of Appeals for the Second Circuit.



Reviews

TL
Thomas L.

Excellent overview

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