IRS Partnership Audit Rules for Tax Counsel: Managing Partnership Operations and Governance

Partnership Agreement Drafting Considerations, Commercial Impacts, Transfers and Admissions of New Partners

Recording of a 90-minute premium CLE/CPE webinar with Q&A


Conducted on Thursday, July 30, 2020

Recorded event now available

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Program Materials

This CLE/CPE webinar will provide tax counsel with an up-to-date look at the drafting, commercial, and compliance implications of the partnership audit rules, including a discussion of IRS guidance on issues presented by the statute. The panel will describe the partnership audit processes in detail, outlining the changes that facilitate IRS audits of partnerships and strategies for tax counsel. The speakers will offer concrete suggestions on the partnership agreement and purchase agreement drafting provisions and other issues to consider with respect to the audit rules, including administrative relief granted in the wake of the CARES Act.

Description

The partnership audit rules allow the IRS to audit partnerships at the entity level and assess and collect taxes against the partnership unless it elects out of the regime. This impacts the formation and operations of partnerships, as well as the disposition of partnership interests and the admission of new partners.

The rules are designed to facilitate IRS audits of partnerships, thus leading to more audit frequency, and completely overhauled the Service's approach to partnership examinations. The audit rules have a significant effect on the drafting of partnership agreements and purchase agreements. Tax counsel will have to consider issues such as protection of minority partners, specifying which party will bear the cost of taxes imposed at the partnership level and indemnities for pre-closing taxes.

The rules address several procedural and substantive tax issues. Tax counsel should evaluate existing partnership agreements to prepare clients for the commercial, operational, and compliance impact of the audit rules, as well as incorporating the law's provisions for all new partnership agreements, purchase agreements, and agreements in connection with the winding up of a partnership.

Listen as our expert panel provides a critical analysis of the impact of the partnership audit rules. The panel will offer insights on how to address the changes brought about by the audit processes and detail the commercial and operation concerns arising from the audit rules.

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Outline

  1. A detailed discussion of the partnership audit rules
  2. Drafting and modifications required for existing partnership agreements
  3. Alternate procedures for partnerships seeking to opt-out of entity-level assessments
  4. Impact on transfers of partnership interests and admission of new partners
  5. Procedural protections for minority partners

Benefits

The panel will review these and other critical issues concerning the IRS partnership audit processes:

  • How the entity-level change facilitates IRS audits
  • Role of the "tax representative" and "designated individual" with respect to audit
  • Commercial and transitional issues
  • Drafting and amending partnership agreements and purchase agreements

Faculty

Martin, Heath
Heath Martin

Counsel
Davies Ward Phillips & Vineberg

Mr. Martin's experience includes partnership drafting and defending  individuals and businesses in federal and...  |  Read More

Stein, Jonathan
Jonathan Stein

Director
Goulston & Storrs

Mr. Stein advises public and private companies, investment funds and real estate investors on corporate,...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$347

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CPE Not Available

$347