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Changes to Parntership Audits - What You Need to Know 

On November 2, 2015 President Obama signed into law H.R. 1314, the Bipartisan Budget Act of 2015 ("the Budget Act"). Generally effective for returns filed for partnership tax years beginning after 2017, the Budget Act repeals the unified audit rules established by TEFRA of 1982 and the special rules for electing large partnerships and replaces them with a single system of centralized audit, adjustment, and collection of tax for ALL partnerships, except for a certain eligible partnerships that affirmatively elect out of the regime for a tax year. It is anticipated that these changes will require most partnerships to consider the impact of the new law on their agreements and transactions. In addition, the new law will need to be taken into account in connection with partnership due diligence.



Insights in Print

Immediate changes possibly required, partnerships employing partners through disregarded entity

Proposed and temporary regulations were issued in early May 2016, relating to the employment tax treatment of employees of a disregarded entity that is wholly owned by a partnership. If the employees of the disregarded entity are also partners in the partnership that owns it, the new regulations may require immediate changes to the withholding and benefits treatment of those individuals. 

The New Partnership Audit Rules - An Executive Summary
Taxpayers need to understand and consider the new rules.

New Partnership Audit Rules - What We Know So Far (And What Still Needs to Be Clarified)

New rules have created a new world for partnership audits and triggered an avalanche of economic, business, legal, an investor relations ramifications.

KPMG Report: Preliminary Analysis of Partnership Tax Changes in Budget Act

Read KPMG’s description of the partnership tax provisions:

KPMG Report:  Preliminary Observations about JCT "Bluebook" description of partnership audit reforms.

KPMG Report: Preliminary Analysis of Partnership Tax Changes in Budget Act.




A Whole New World for Partnership Audits - December 9, 2015 replay on the enacted law on partnership audits and the impact it may have on partnership agreements, due diligence, and financial statements -

Technology to Help Streamline Tax Planning, Compliance, and Reporting

KPMG's Passthrough Services

For more information about how we can help partnership structures with their unique tax challenges visit KPMG's Passthrough Services.


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Deborah Fields

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