Page 23 - The TEFRA Partnership Audit Rules Repeal:

TEFRA v. BBA—Comparison (cont.)
Payment of Partnership Adjustments
TEFRA
• Any tax, penalties, and interest are assessed and collected at the partner level
• Tax due determined by each partner’s tax situation
BBA
• Default rule: The partnership, rather than the partners, pays the “imputed underpayment”
̶ Imputed underpayment is calculated by multiplying the net adjustment by the highest statutory corporate or individual rate
• Adjustments are taken into account in the “adjustment year”
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