Page 66 - The TEFRA Partnership Audit Rules Repeal:

Partnership Agreement Provisions (cont.)
Provisions on the Selection and Removal of the Partnership Representative (cont.)
• The partnership agreement might merely provide a clawback from prior partners of their shares of the partnership payment of the assessment.
• The partnership agreement might provide a special clawback from partners whose interests in the partnership have been diminished from the reviewed year [the year under audit].
• The partnership agreement should set up a mechanism for funding the assessment, particularly if the partnership may not have enough free cash to pay the assessment. The funding mechanism might be by way of a mandatory capital call.
• There also may be a need to fund the assessment after the partnership has liquidated.
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