Page 202 - 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
Penalties, additions to tax, additional amounts
Penalties, additions to tax, and additional amounts are determined at the partnership level; 215 [215 Secs. 6221 and 6226(c).] each reviewed year partner is liable for its share of the penalty, addition to tax, and additional amount.216 [216 Sec. 6226(c).]
Interest at partner level from reviewed year, with adjustments
In the case of an imputed underpayment for which the election under this provision is made, interest is determined at the partner level.217 [217 Sec. 6226(c)(2).] Interest is determined from the due date of the partner’s return for the taxable year to which the increase is attributable. Interest is determined taking into account any increases attributable to a change in tax attributes for an intervening tax year. The rate of interest determined at the partner level is the underpayment rate as modified under the provision, that is, the rate is the sum of the Federal short-term rate (determined monthly) plus 5 percentage points.
Time and manner of making election
The partnership may make this election not later than 45 days after the notice of final partnership adjustment.218 [218 Sec. 6226(a)(1).] The election is revocable only with the consent of the Secretary. The election may be made whether or not the partnership files a petition for judicial review of the notice of final partnership adjustment.219 [219 Sec. 6226(d). See section 411 of the Protecting Americans from Tax Hikes Act of 2015 (Division Q of Pub. L. No. 114-113).]
The partnership may make the election within 45 days from the notice of final partnership adjustment, and within 90 days from the notice of final partnership adjustment may file a petition for readjustment with the Tax Court, district court, or Court of Federal Claims.220 [220 Sec. 6234.] Upon the final court decision, dismissal of the case, or settlement, the partnership is to implement the election by furnishing statements (at the time and manner prescribed by the Secretary) to the reviewed year partners [partners in the year under audit] showing each partner’s share of the adjustments as finally determined. As part of any settlement, for example, it is contemplated that the Secretary may permit revocation of a previously made election, and the partnership may pay at the partnership level.
© Terence Floyd Cuff and Jerald David August, 2016
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