Ropes & Gray tax associate M. Kathryn Seevers co-authored an article titled “One Step Closer: An Update on Partnership Audit Reform in the United States,” which was published in the April-June issue of Risk & Compliance. The authors note that the “business community has been waiting to find out how expansive” the sweeping tax rule changes resulting from the Bipartisan Budget Act of 2015 (BBA Rules) will be, and the article illuminates partnership audit reform in the wake of the BBA Rules. The authors explain the potential effects of the U.S. Treasury’s proposed regulations, released on Jan. 18, which “specify a narrow set of partnerships that are permitted to opt out of the BBA Rules, broaden the powers of the ‘partnership representative’ (the party with delegated authority to act on behalf of the partnership), define an expansive scope of tax to be collected in a partnership proceeding under the new Rules, set out detailed mechanics for calculating the amount of tax payable by the partnership on behalf of its partners (referred to in the BBA Rules as the ‘imputed underpayment’), and create innovative rules for partnerships that wish to ‘push out’ adjustments from the partnership, making individual partners liable for any additional tax.”
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