The U.S. Treasury Department and IRS today released for publication in the Federal Register proposed regulations (REG-136118-15) regarding implementation of the centralized partnership audit rules that, in general, concern the assessment and collection of tax at the partnership level.
Today’s proposed regulations [PDF 500 KB] provide in 69 pages, rules for partnerships subject to new partnership audit rules, and include:
Today’s release withdraws prior proposed regulations.
Today’s proposed regulations for implementing a centralized partnership audit regime are substantially the same as proposed regulations that were posted on the IRS website in January 2017 and then almost immediately removed. Read TaxNewsFlash-United States. The only significant change in these proposed regulations from the draft posted in January 2017 concerns the “push out” election under section 6226.
The January 2017 draft “reserved” on the issue as to whether a pass-through partner could elect to push out the adjustment to higher tiers. Today’s proposed regulations also reserve on this issue, but add that Treasury and the IRS are considering allowing such a push-out of the adjustment beyond the first tier partners and that proposed regulations addressing that issue will be published “in the near future.” The preamble [PDF 984 KB] also requests comments as to how the IRS might administer section 6226 in a tiered structure.
The proposed regulations would affect partnerships for tax years beginning after December 31, 2017, and any partnerships that elect application of the centralized partnership audit regime for tax years beginning after November 2, 2015 (date of enactment), and before January 1, 2018.
Today’s release also provides a notice of a public hearing scheduled for September 18, 2017, on the proposed regulations. Written or electronic comments must be received by 60 days after publication in the Federal Register, which is scheduled for June 14, 2017.
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.