Tax Cuts & Jobs Act- Brian Miller, CPA, MT, Manager
As part of the Bipartisan Budget Act of 2015, the way the IRS is auditing partnerships is changing starting with tax years beginning in 2018.
Previously, the IRS would audit partnership items and adjust them only in partnership-level proceedings. Once the adjustments were made, each partner had to make corresponding adjustments to their return where they would be responsible for any taxes due, interest & penalty.
Under the new audit rules, adjustments will be made at the partnership level and generally any additional tax, penalties or interest will also be determined & collected at the entity level unless the partnership elects an alternative payment process.
Certain partnerships with less than 100 partners may elect out of these new audit rules.
These new rules create new roles & responsibilities that could lead to disagreements among partners. Many of these disagreements can be avoided by carefully reviewing & revising existing partnership agreements.
Please contact Hall, Kistler at 330-453-7633 if you would like additional information on how these rules may impact your business or click on my name above for assistance.