Page 172 - 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
partnership, but the Code does not say that no partner can be present during audit proceedings. The partnership accountants and counsel presumably can be present during the audit process. It is not clear that a partner cannot be present at least as a silent observer. Of course, in appropriate situations, a partner might also be the partnership accountant or counsel. We will have to wait for regulations more definitively to resolve the participation of a partner in the proceedings and whether a partner might be a silent observer.
The partnership agreement might address technical issues such as how to fund the partnership audit and how to fund the partnership audit if the partnership has dissolved. This may require additional capital contributions from the partners.
c. Possible Additional Powers of Partnership Representative.
The partnership agreement draftsman should consider the appropriate powers and obligations of the partnership representative. The partnership agreement draftsman should consider how the partnership will fund the audit and whether compensation to the partnership representative is appropriate.
The partnership representative may have powers beyond those expressly referred to in the partnership audit provisions. These might include these powers related to the partnership audit or a lawsuit growing out of the partnership audit:
 The power to engage accountants and attorneys.
 The power to task accountants and attorneys.
 The power to approve invoices for services and expenses from accountants attorneys.
 The power to incur audit expenses on behalf of the partnership.
 The right to incur filing fees.
 The right to occupy partnership offices.
 The right of access to partnership books and records.
 The right to communicate directly with partners of the partnership.
 The right to make capital calls for audit expenses.
 The right to use partnership credit cards.
 The right to write checks on the partnership bank account.
© Terence Floyd Cuff and Jerald David August, 2016
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