KPMG report: New partnership audit rules

New partnership audit rules in the United States

The recently enacted the Bipartisan Budget Act of 2015 includes major changes to the way the IRS will audit entities that are classified as partnerships for federal income tax purposes. The new rules repeal the current regime of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and generally apply to tax years beginning after December 31, 2017.

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Although certain partnerships may elect out of the regime, partnerships that are required to furnish more than 100 Schedule K-1s or that have a partner that is a trust or a partnership (as is common in many organizational structures) are ineligible to make the election. Accordingly, taxpayers need to understand and consider the new rules today.


Read a February 2016 report [PDF 146 KB] prepared by KPMG LLP: What’s News in Tax: The New Partnership Audit Rules—An Executive Summary

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