On January 2, the Internal Revenue Service (IRS) posted the final regulation on the new rules governing the audits of partnerships. The final regulation does not make many significant changes. Confirmed were the limitations on the number of partners, and which type of entity is considered to be an eligible partner. All types of trusts, including grantor (revocable) trusts and most other disregarded entities are not eligible partners.
Gray, Gray & Gray presented an overview of the new partnership audit rules during a webinar in late December. The information presented at that time remains accurate. You can view an archived version of this webinar (approximately 36 minutes) here.
The rules on how to opt-out or mitigate the new rules on audits of partnership are long and complex. If you have questions regarding the new partnership audit rules please contact our Tax Department at (781) 407-0300.