Jan 18, 2016
From the Financial Reporting View
On November 2, 2015, President Obama signed into law H.R. 1314, the Bipartisan Budget Act of 2015, which includes new rules for audits and adjustments of partnerships as defined in the IRS Code. The legislation responds to challenges faced by the IRS in auditing large partnerships, and generally provides for assessment and collection of an imputed underpayment of tax at the partnership level. Thus, the Budget Act could characterize certain obligations as income taxes of the partnerships at the entity level even though they are pass-through entities . The new rules may also require additional analysis of the entity's accounting for uncertainty in federal income taxes, and additional financial statement disclosures under FASB ASC Topic 740, Income Taxes. KPMG LLP's Washington National Tax published Potential Financial Reporting Implications of Changes to Partnership Examinations, which addresses these accounting issues.
The new rules generally are effective for returns filed for partnership tax years beginning after December 31, 2017.