New Partnership Representative Final Regulations Under Section 6223 Centralized Audit Regime

Using Disregarded Entities With Designated Persons, Removing and Replacing Partnership Representatives

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


Conducted on Thursday, October 25, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers to partnerships with a practical guide to the recently issued final regulations on the designation of partnership representatives for purposes of the centralized audit rules. The panel will discuss the process for naming, terminating and replacing partnership representatives, using disregarded entities as representatives, and notice requirements. The webinar will also outline the differences between the final regulations and the previous temporary regs, and detail potential issues for tax advisers and compliance professionals.

Description

As part of a flurry of regulatory guidance, the IRS on Aug. 6, 2018, finalized regulations governing the designation of partnership representatives for purposes of the centralized partnership audit regime. The final regulations make some significant changes to previously proposed regs, so tax advisers should have a solid understanding of the scope of a partnership representative’s role to avoid adverse tax consequences.

Section 6223 requires partnerships to designate a “partnership representative who shall have the sole authority to act on behalf of the partnership” on matters related to IRS examinations of the partnership. The requirement created confusion among practitioners, as indicated in the comment period for the proposed regulations.

The final guidance takes many of the comments into account, including allowing a disregarded entity (DRE) to serve as a representative of the partnership, but only with the selection of a “designated individual” to act on behalf of the representative DRE. Critically, the Service also removed the capacity to act requirement for designated representatives.

The final regulations also offer extensive guidance on the process of removing or replacing a partnership representative. Taken as a whole, the regs provide a roadmap for tax professionals to advise partnership clients on ensuring that the partnership representative can appropriately respond to the partnership’s potential tax issues.

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. Structure of centralized audit regime for partnerships
  2. Role of the partnership representative under Section 6223
  3. Final Section 6223 regulations and changes from prior proposed regs
  4. Designating a DRE as partnership representative
  5. IRS procedures for when a partnership fails to designate an eligible party as partnership representative
  6. Terminating/replacing partnership representative

Benefits

The panel will discuss these and other relevant topics:

  • What changes do the final regulations make to the “capacity to act” provision in the proposed regs?
  • How to change a partnership representative after the IRS has contacted a partnership about a possible audit
  • Rules governing the use of DREs as partnership entities
  • Changes to the provision allowing the IRS to designate a representative if the partnership has not made an eligible selection

Faculty

Kmiecik, Mark
Mark G. Kmiecik

Shareholder
Davis & Kuelthau

Mr. Kmiecik is a corporate attorney and advises clients on international, federal, state, and local tax matters,...  |  Read More

Smitha, Thomas
Thomas L. Smitha

Associate Director of Tax Services
Berkowitz Pollack Brant Advisors and Accountants

For more than 30 years, Mr. Smitha has provided accounting services, tax planning, and consulting and tax structuring...  |  Read More

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