Page 170 - The TEFRA Partnership Audit Rules Repeal:

ALI CLE Live Video Webcast / “The TEFRA Partnership Audit Rules Repeal: Partnership and Partner Impacts” June 7, 2016, Jerald David August and Terence Floyd Cuff
enables the partnership representative to meet with the Secretary in the United States as is necessary or appropriate, and facilitates communication during the audit process and during any other proceedings in which the partnership is involved. In any case in which such a designation by the partnership is not in effect, the Secretary may select any person as the partnership representative.
b. Powers of Partnership Representative.
The partnership representative has the power –
 to extend statutes of limitations, and
 to settle the audit.
The partnership and the partners are bound by these decisions made by the partnership representative:
 a settlement agreement entered into by the partnership,
 a notice of final partnership adjustment with respect to the
partnership that is not contested, or
 the final decision of the court with respect to the partnership if the notice of final partnership adjustment is contested.
Among other things, the partnership representative:
 Can meet with the Internal Revenue Service in the audit as is necessary or appropriate, and
 Facilitates communication during the audit process and during any other proceedings in which the partnership is involved.
The acts of the partnership representative bind the partnership and the partners in the audit. The partnership representative has the sole authority to act on behalf of the partnership under the centralized system. This nevertheless leaves the possibility that the partnership can contractually limit the rights of the partnership representative. A well-drafted partnership or LLC agreement will deal extensively with the rights and obligations of the partnership representative.
i. Role in Election Out.
The role of the partnership representative in making the election out of the partnership audit rules could use further clarification in regulations.
© Terence Floyd Cuff and Jerald David August, 2016
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