Electing Out of New Centralized Partnership Audit Regime: New IRS Final Regulations on Opt-Outs

Determining "Eligible Partnerships," Notification Requirements, Advantages and Hazards of TD 9879 Election

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, February 28, 2018

Recorded event now available

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Program Materials

This webinar will provide tax advisers to partnerships with a practical guide to the recently issued final regulations on the process for qualified partnerships to opt out of the new IRS partnership audit regime. The panel will discuss which partnerships are eligible for the election, describe the benefits and hazards of opting out, and detail the steps required to make the election.

Description

The Treasury recently released the first of its long-awaited final regulations on the new centralized partnership audit rules. TD 9879, released Jan. 2, 2018, provides regulatory guidance on how eligible partnerships may elect to opt out of the audit regime. Tax advisers need to quickly grasp the implications of deciding whether to elect out of the new audit procedures to avoid messy tax consequences.

The new centralized partnership regime allows the IRS to examine, assess and collect tax at the partnership entity level. This could impact new partners, who might find themselves liable for their pro rata share of a tax assessment for a year prior to their ownership of partnership interest. The final regulations address this by allowing partnerships that issue fewer than 100 K-1 Schedules, and all partners are “eligible partners,” to elect out of the entity-level assessment rules.

Partnership tax advisers must determine whether an opt-out election is the optimal tax strategy. By making the election, the partnership chooses to have audit adjustments reflected in the year an audit is concluded rather than in the year being audited. Advisers also must have thorough knowledge of the rules determining who is an "eligible partner" for purposes of determining whether an election is available, and the notification requirements for both partners and the IRS.

Listen as our experienced panel provides a thorough and practical guide to the strategies and mechanics of electing out of the centralized partnership audit rules.

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Outline

  1. Summary of centralized audit regime
  2. TD 9829 opt out election provisions
  3. Determining eligible partners
  4. Application to S corporations
  5. Determining whether to make election
  6. Notification and filing requirements

Benefits

The panel will discuss these and other important topics:

  • What an opt-out election accomplishes for an eligible electing partnership
  • When a partnership should not choose to make an opt out election
  • How the centralized audit regime impacts S corporations
  • Determining whether a partnership may make an opt out election
  • Notification requirement to partners and IRS
  • Revoking election

Faculty

Lovett, Brian
Brian T. Lovett, CPA, JD

Partner
WithumSmith+Brown

Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses,...  |  Read More

Mandarino, Joseph
Joseph C. Mandarino

Partner
Smith Gambrell & Russell

Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of...  |  Read More

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