Jonathan Stein Authors “Drafting Partnership Agreements Under New Audit Regime” Law360 Article
Counsel Jonathan Stein, a member of Pryor Cashman’s Tax Group, authored the Law360 article, “Drafting Partnership Agreements Under New Audit Regime” which appeared on March 8, 2016.
As part of the Bipartisan Budget Act, Congress repealed the statute that currently governs partnership audits for tax years beginning after Dec. 31, 2017. The new legislation makes far-reaching changes to both the procedural rules around partnership audits and the economic burden of any additional tax, interest and penalties that arise as a result of the audit. The IRS can now collect the amount due from an audit from the partnership directly, unless a partnership elects to pass this audit adjustment onto the partners.
In his Law360 article, Stein addresses five scenarios that partnerships undergoing audits need to take once the new rules are in effect. Although IRS regulations governing the new rules have yet to be issued, drafters of new or amended partnership agreements should be sure that their agreements cover the most common scenarios that may arise under the new audit regime.
