New Partnership Audit Rules under the Bipartisan Budget Act of 2015
Prior to the enactment of the Bipartisan Budget Act of 2015 (“BBA”), partnership audits were conducted exclusively under rules set forth in TEFRA. In practice, the TEFRA rules have proven to be complex to interpret and burdensome to administer effectively and, ultimately, economically unfruitful in comparison to corporate audits. As such, partnership audits have been, relatively speaking, few in number and unappealing to the IRS from the viewpoint of capturing additional revenue. In enacting the BBA, Congress has taken the opportunity to rewrite the partnership audit rules in a way intended to streamline the audit process, which will likely result in an increased level of audit activity.
Commonwealth Trust Company is pleased to provide this article as a guide. Commonwealth Trust Company is not engaged in the practice of law and is not providing legal advice by the provision of these materials. Commonwealth Trust Company recommends that clients seek the opinion of their attorney regarding the specific legal and tax issues addressed in this article.