United States

The New Centralized IRS Partnership Audit Regime

Impacts taxpayers that conduct business through partnerships now and in the future.

 

Effective tax years beginning January 1, 2018, a new centralized IRS partnership audit regime will transform partnership audits and the assessment and collection of tax, affecting all taxpayers that conduct business through partnerships now and in the future.

 

The new regime:

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Applies to all partnerships regardless of the number of partners

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Imposes an entity level tax at a potential 38% tax rate

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Replaces the Tax Matters Partner (TMP) with a Partnership Representative who has exclusive broad-ranging authority over the partnership and its partners

Sectors potentially impacted by the new regime:

Alternative Investments

Alternative Investments

Private Markets

Private Markets

Private Equity

Private Equity

Insights from KPMG

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Privately Speaking: The Impact of the New Partnership Audit Regime on Privately Held Companies

Read KPMG's recent issue of our bi-monthly Privately Speaking newsletter, where we highlight the new proposed regulations and its significance to privately held companies.

> Read the newsletter here

 

 

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Webcast Replay: The New Centralized IRS Partnership Audit Regime: Moving Forward Now…

In this Webcast replay, senior-level professionals from KPMG's Washington National Tax group and Tax Dispute Resolution Network present a review of the new regime, including:

  • An overview of the new partnership audit rules
  • The recently proposed regulations, including highlights of the important points
  • What taxpayers should be doing now to be prepared

(Original airdate: August 22, 2017)

Launch the replay here  

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The New Partnership Audit Rules: An Executive Summary

Congress enacted the Bipartisan Budget Act of 2015 (the “Act”), which included major changes in the way the IRS will audit entities that are classified as partnerships for federal income tax purposes. As discussed in this What’s News in Tax article, taxpayers need to understand and consider the new rules today.

> Read the article here

 

 

 

 

Latest News

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Tax Technical Corrections Are Enacted, Include Partnership Provisions

The president has signed legislation that includes tax technical correction provisions for certain partnership measures. Known as the "omnibus" appropriations bill, the legislation (H.R. 1625) funds various government programs through the end of the fiscal year (i.e., through September 30, 2018).

> Read more

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Proposed Regulations: Adjusting Tax Attributes Under the Centralized Partnership Audit Regime

The U.S. Treasury Department and IRS today released for publication in the Federal Register proposed regulations (REG-118067-17) as rules addressing how partnerships and their partners adjust tax attributes to take into account partnership adjustments under the centralized partnership. 

> Read more

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Final Regulations: Election Out of Centralized Partnership Audit Regime

The U.S. Treasury Department and IRS released an advance version of final regulations (T.D. 9829) concerning the rules and procedures for electing out of the centralized partnership audit regime.

> Read more

 

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Proposed Regulations: Centralized Partnership Audit Regime

The U.S. Treasury Department and IRS today released for publication in the Federal Register a notice of proposed rulemaking (REG-120232-17 and REG-120233-17) or proposed regulations to implement the centralized partnership audit regime, as enacted in 2015.

> Read more

 

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Centralized Partnership Audit Regime and Withholding, Reporting Rules

The U.S. Treasury Department and IRS today released for publication in the Federal Register a notice of proposed rulemaking (REG-119337-17) containing proposed regulations addressing how certain international tax rules operate under the U.S. centralized partnership audit regime.

> Read more

 

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Defining Issues: Recent IRS Audit Rules May Affect How Partnerships Account for Tax Underpayments

Read KPMG's new issue of Defining Issues that reports on the changes that partnerships may need to make to their financial reporting beginning in 2018.

> Read the report here

 

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Proposed Regulations: Centralized Partnership Audit Rules, Initial Impressions

The U.S. Treasury Department and IRS today released for publication in the Federal Register proposed regulations (REG-136118-15) regarding implementation of the centralized partnership audit rules that, in general, concern the assessment and collection of tax at the partnership level. 

> Read more

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Contact Us

Miri Forster

Miri Forster

Principal, Tax Controversy Services, KPMG LLP

E: mcforster@kpmg.com

ossie-borosh

Ossie Borosh

Principal, Passthroughs Group, KPMG LLP

E: oborosh@kpmg.com

curtis-wilson

Curtis Wilson

Director, Practice, Procedure, and Administration, KPMG LLP

E: curtiswilson@kpmg.com

deborah-fields

Deborah Fields

Principal-in-Charge, Passthroughs Group, KPMG LLP

E: dafields@kpmg.com

harve-lewis

Harve Lewis

Director, Practice, Procedure, and Administration, KPMG LLP

E: harvelewis@kpmg.com

KPMG's Passthroughs Services Group

The people, technology and industry experience to support the needs of partnership and passthrough entities.

KPMG's Tax Controversies Services

Learn how KPMG’s Tax Controversies Services may help you prepare for the new Partnership Audit Regime.