Partnership Audit Adjustments Under the Centralized Audit Regime

Push-Out and Pull-In Adjustments, Audit Tips, and Forms 8978 and 8986

Note: CLE credit is not offered on this program

A live 110-minute CPE webinar with interactive Q&A

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This program is included with the Strafford CPE+ Pass. Click for more information.
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Wednesday, October 19, 2022

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

or call 1-800-926-7926

This course will cover practical considerations for partners and advisers to partnerships operating under the new partnership audit regime. Our panel of experts will review the latest guidance, explain partnership audit adjustments, and recommend steps to implement this reporting regime.

Description

IRS audits are taking place under the Bipartisan Budget Act's new audit regime, and tax professionals are wrestling with the complexities of the new requirements. Under these rules, the partnership itself remits any underpayment resulting from an IRS examination at the end of an IRS review. It pays the additional tax due at the highest income tax rate (37 percent currently).

Alternatives include making a push-out election taxing the individual partners' interests during the year examined and showing that partners have amended their returns to account for the adjustments. The Corrections Act in 2018 reduced the burden of filing amended returns by allowing partners to pay the amount of tax due and adjust any related tax attributes without the limitation of filing amended tax returns, the pull-in procedure.

The reporting regime includes Form 8986, Partner's Share of Adjustments to Partnership-Related Items, and Form 8978, Partner's Additional Reporting Year Tax. Partners receiving Form 8986 must file Form 8978 to report additional tax due as a result of examination adjustments. Multiple forms may be obtained, covering changes for different years, and these adjustments could be both negative and positive.

The rules are so complex that the AICPA recommended a new form AAR-EZ to simplify the reporting process.

Listen as our panel of experts explains the ins and outs of audits under BBA, including making push-out and pull-in adjustments, electing out, and best practices for handling the audit.

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Outline

  1. The centralized audit regime
  2. Electing out
  3. Partnership representatives
  4. Handling the audit
  5. Reporting
    1. Form 8978, Partner's Additional Reporting Year Tax
    2. Form 8986, Partner's Share of Adjustments to Partnership-Related Items
    3. Form 8979, Partnership Representative Revocation, Designation, and Resignation
    4. Form 8985, Pass-Through Statement--Transmittal/Partnership Adjustment Tracking Report
  6. Partnership agreements

Benefits

The panel will review these and other vital issues:

  • Push-out adjustments
  • Pull-in adjustments
  • IRS forms for reporting audit adjustments
  • Reviewing existing and considerations for new partnership agreements
  • Recommendations for handling the IRS examination

Faculty

Horwitz, Robert
Robert Horwitz

Principal
Hochman Salkin Toscher Perez

Mr. Horwitz has over 35 years of experience as a tax attorney specializing in the representation of clients in civil...  |  Read More

Kalinski, Jonathan
Jonathan Kalinski

Principal
Hochman Salkin Toscher Perez

Mr. Kalinski specializes in both civil and criminal tax controversies as well as sensitive tax matters including...  |  Read More

Stein, Michel
Michel R. Stein

Principal
Hochman Salkin Toscher Perez

Mr. Stein specializes in tax controversies, as well as tax planning for individuals, businesses and corporations. For...  |  Read More

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