As of Jan. 1, the Internal Revenue Service regulations implementing the new partnership audit rules—also known as the New Rules—which were enacted in 2015 by the Bipartisan Budget Act of 2015, became effective.

The new federal partnership tax audit regime (as now in effect) dramatically changes the landscape for pass-through entities by making partnerships, and not the partners, liable for payments of any federal taxes assessed as a result of an audit at the partnership level. …

This radical revamp of partnership audit rules impacts every partnership and limited liability company taxed as a partnership. …

The effect of the New Rules is significant and partnerships that have not taken any actions to amend or revise existing operating documents should do so accordingly to avoid impacts both with respect to economics and control of the partnership in connection with the New Rules.

To read the full article, visit the Miami Herald website.

Reprinted with permission from the Miami Herald.