Page 201 - 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
additions to tax or additional amounts are not determined at the partnership level under the alternative payment rule contained in Section 6226(b). Instead, the items or amounts are determined solely at the partner level. Interest will be determined at the partner level. Interest commences from the due date of the return for the reviewed year in question, taking into account any increase resulting from a change in tax attributes in the reviewed year or in succeeding years and at the underpayment rate in Section 6621(a)(2) using 5% instead of the customary 3%.
The GENERAL EXPLANATION OF TAX LEGISLATION ENACTED IN 2015 (JCS-1-16, March 2016) explains the push out regime:
Alternative to payment of imputed underpayment by partnership
As an alternative to partnership payment of the imputed underpayment in the adjustment year, the audited partnership may elect to furnish to the Secretary and to each partner of the partnership for the reviewed year a statement of the partner’s share of any adjustments to income, gain, loss, deduction and credit as determined in the notice of final partnership adjustment.213 [213 Sec. 6226(a).] In this case, each such partner takes these adjustments into account and pays the tax as provided under the provision.214 [214 Sec. 6226(b).]
Payment by reviewed year partners in year that includes date of the statement
The reviewed year partner’s tax is increased for the partner’s taxable year that includes the date of the statement.
Amount of the reviewed year partner’s adjustment
The reviewed year partner’s tax is increased by an amount equal to the aggregate of the adjustment amounts as determined under the provision. This includes the amount by which the partner’s tax would increase if the partner’s distributive share of the adjustment amounts were included for the partner’s taxable year that includes the end of the reviewed year, plus the amount by which the tax would increase by reason of adjustment to tax attributes in years after that year of the partner and before the year of the date of the statement. Tax attributes in any subsequent taxable year are required to be appropriately adjusted.
© Terence Floyd Cuff and Jerald David August, 2016
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