August 9, 2017
Partners should review, and possibly revise, their operating agreements to reflect proposed IRS changes to ensure their partnerships are properly equipped to undergo an IRS audit.
The new rules generally apply to partnerships for tax years beginning after December 31, 2017.
New Provisions Include:
*In the event of an audit and assessment, the IRS may now collect any additional taxes, interest, and penalties directly from the partnership, rather than going to the individual partners. The tax is generally assessed at the highest individual tax rate.
*If there have been changes in the ownership structure, current partners could be responsible for tax liabilities of prior partners. Elections and opt-outs of the proposed regulations may be available, and your agreement may need revision to specify who makes these decisions.
*There are new tax terms and concepts that will likely require you to adjust your partnership’s operating agreement.