Page 62 - The TEFRA Partnership Audit Rules Repeal:
P. 62
Partnership Agreement Provisions (cont.)
Provisions on the Selection and Removal of the Partnership Representative (cont.)
• Indemnification of the partnership representative. The partnership agreement presumably will have extensive provisions that indemnify the partnership representative. The provision might address these issues.
• Multiple Questions:
− Does the indemnification extend to punitive damages?
− To whom does the indemnification extend?
− What expenses are indemnified?
− What standard of care must the partnership representative satisfy in order to be indemnified?
− Does the indemnification extend to fines and penalties?
− What are the limitations on the indemnification?
− What matters are not indemnified (such as matters arising out of negligence, bad faith, or willful misconduct)?
Copyright © 2016 Kostelanetz & Fink, LLP Coming changes to IRS Audits of partnerships 53
