Page 70 - The TEFRA Partnership Audit Rules Repeal:

Table of Contents
1. Introduction. ......................................................................................... 5
a. State Audit Rules. ........................................................................ 8
b. Cautionary Statement. ................................................................. 8
c. TEFRA Rules. ............................................................................... 8
d. Will New Partnership Audit Rules Increase Revenues? ................ 12
e. Need to Take New Rules into Account in
Drafting Partnership Agreements................................................ 15
2. Basics Under New Regime.................................................................... 15
a. Adjustments under the New Regime. .......................................... 15
b. Reviewed Year and Adjustment Year. .......................................... 18
c. Payment of Imputed Underpayment by the Partnership. ............. 19
3. Effectiveness of New Rules under the Bipartisan Budget Act
of 2015. ............................................................................................... 21
4. TEFRA Audit Rules. ............................................................................. 23
5. Electing Large Partnership Audit Rules. ............................................... 30
6. General Explanation Summary of the New Partnership
Audit Rules.......................................................................................... 35
7. Election out. ........................................................................................ 48
a. Effect of Election Out. ................................................................ 48
b. Requirements of Election Out ..................................................... 53
c. Qualifying Partner for Election Out............................................. 53
d. Possible Expansion of Qualifying Partners. ................................. 56
i. Partners in a partnership or tiers of partnerships
may qualify as eligible partners to elect out of the consolidated audit rules.................................................... 56
ii. Trusts as eligible to be part of an “election out” of the consolidated audit rules.................................................... 59
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© Terence Floyd Cuff and Jerald David August, 2016