Final Partnership Audit Regime Regulations Issued (T.D. 9844)

The IRS has issued final regulations implementing the centralized partnership audit regime. The final regulations, among other items, make changes to:

– the definition of item or amount with respect to the partnership;

– the definition of partner’s return; and

– notification requirements.

Item or amount with respect to the partnership

The final regulations revise the definition of “item or amount with respect to the partnership, including replacing the list of eight categories of items or amounts that were “with respect to the partnership” in proposed regulations with a single paragraph. They clarify that the term “partnership-related item” does not include items or amounts that would have been TEFRA affected items or computational adjustments. The regulations clarify an imputed underpayment is always a partnership-related item.

Partner’s Return

The final regulations provide that the term “partner’s return” includes any return, statement, schedule, or list, and any amendment or supplement thereto, filed by the partner with respect to any tax imposed by the Internal Revenue Code. Accordingly, a partner on either an original or an amended return must treat partnership-related items consistently with how those items were treated on the partnership return filed with the IRS.

Limitations on Filing Amended Returns Reporting Inconsistent Positions

The final regulations provide that a partner may not notify the IRS that the partner is treating an item inconsistently with the partnership return for a tax year after a notice of administrative proceeding with respect to the partnership tax year has been mailed by the IRS.

Among other changes the final regulations clarify rules on credit recapture and modification issues.

Effective Date

These final regulations affect partnerships for tax years beginning after December 31, 2017 and ending after August 12, 2018, as well as partnerships that make the election to apply the centralized partnership audit regime to partnership taxable years beginning on or after November 2, 2015, and before January 1, 2018. The regulations are effective on the date of publication in the Federal Register.

T.D. 9844

Other References:

Code Sec. 6221

– CCH Reference – 2018FED ¶37,952F

– Code Sec. 6222

– CCH Reference – 2018FED ¶37,958B

– Code Sec. 6225

– CCH Reference – 2018FED ¶37,972D

– CCH Reference – 2018FED ¶37,973D

– CCH Reference – 2018FED ¶37,974D

– Code Sec. 6226

– CCH Reference – 2018FED ¶37,978D

– CCH Reference – 2018FED ¶37,978F

– CCH Reference – 2018FED ¶37,980F

– Code Sec. 6227

– CCH Reference – 2018FED ¶37,984B

– CCH Reference – 2018FED ¶37,985D

– CCH Reference – 2018FED ¶37,986D

– Code Sec. 6231

– CCH Reference – 2018FED ¶37,994B

– Code Sec. 6232

– CCH Reference – 2018FED ¶37,999B

– Code Sec. 6233

– CCH Reference – 2018FED ¶38,006B

– CCH Reference – 2018FED ¶38,007B

– Code Sec. 6234

– CCH Reference – 2018FED ¶38,012B

– Code Sec. 6235

CCH Reference – 2018FED ¶38,023B

Code Sec. 6241

CCH Reference – 2018FED ¶38,033B

CCH Reference – 2018FED ¶38,034B

CCH Reference – 2018FED ¶38,035B

CCH Reference – 2018FED ¶38,036B

CCH Reference – 2018FED ¶38,036CB

CCH Reference – 2018FED ¶38,036CG

Tax Research Consultant

CCH Reference – TRC PART: 60,702

Login to read more tax news on CCH® AnswerConnect or CCH® Intelliconnect®.

Not a subscriber? Sign up for a free trial or contact us for a representative.

AUTHOR

CCHTaxGroup

All stories by: CCHTaxGroup