Navigating the New Partnership Audit Rules: Sea Change or Same Course?

February 01, 2016

The recently enacted Bipartisan Budget Act of 2015 amended existing Internal Revenue Code of 1986, as amended (the “Code”) rules governing tax audits of partnerships in the U.S. These new rules primarily impact partnerships with more than 100 partners and will generally apply to partnership taxable years beginning after December 31, 2017. A partnership may elect to apply the new rules to tax returns for partnership taxable years beginning after November 2, 2015 and before January 1, 2018. Certain partnerships with 100 (or fewer) partners may opt to elect out of the new rules and instead be subject to audits at the partner level.

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