President Obama has recently signed H.R. 1314, The Bipartisan Budget Act of 2015 into law. This new statute will dramatically change the way partnerships and LLCs taxed as partnerships are audited and taxed by the Internal Revenue Service (IRS). The new legislation will become effective on or after January 1, 2018, but partnerships can elect to be subject to the new rules immediately. When the new rules go into effect the IRS will be able to assess or collect any tax deficiencies from the partnership instead of the partners. This column discusses some of the means of electing out of or reducing effect of the new regulations. Those who might be impacted by the new legislation should speak with a tax professional about their options.
See Howard N. Solodky, Mark Wiley, Jeffrey T. Lawyer, Graeme F. Philip, and Michael R. Cashin, United States: Radical New Partnership Audit Rules, Mondaq, November 13, 2015.
