The New IRS Partnership Audit Rules: Why Every Partnership and LLC Operating Agreement will Require Amendment

Duration: 60 Minutes
This webinar will examine the new IRS partnership audit rules that were enacted in November 2015. Virtually every Partnership Agreement and Operating Agreement will in all likelihood need to be amended to take into account at least portions of these new rules. Under these rules, the IRS will audit the partnership as a separate taxable entity, and if there is an assessment, make the assessment against the partnership itself, not the individual partners. The rules also provide for several ways that partnerships and LLCs can opt out, so partners and LLC members will need to analyze whether one or more of the opt-out provisions are available, and if so if opting out is desirable. The new rules also replace the existing "Tax Matters Partner" concept with the "Partnership Representative", whose authority far exceeds that of the Tax Matters Partner. Owners will therefore want to define and possibly limit the authority of the Partnership Representative to deal with the IRS.
New IRS Partnership Audit Rules
Instructor: Mark D. Klimek
Product ID: 501879
Objectives of the Presentation
  • Understand (for comparison purposes) the existing IRS rules which are still generally effective through the end of 2017
  • Be familiar with how the new audit rules work, including the calculation of the tax on assessment
  • Understand the different methods of opting out of the new rules and the key differences between the methods
  • Understand the legal authority that the partnership representative will have to represent the partnership before the IRS under the new rules, and different options for limiting this authority
  • Be able to review existing operating agreements and partnership agreements for areas that will require discussion of the issues presented by the new rules and decisions on implementation by partnership and LLC owners and advisors
  • Understand options for amending existing operating agreements and partnership agreement to take the new rules into account and in many cases limit their application
Why Should you Attend
Every tax and legal advisor to an LLC or partnership will need to understand these rules. Business owners will also need to at least be familiar with the rules since there are many decisions to be made with respect to the implementation (including the possibility of opting out) of the rules, and will need to define the role of the partnership representative of the partnership or LLC.

Areas Covered
  • A brief review of the current partnership audit rules
  • The new partnership (and LLC) audit rules, including calculation of the tax liability upon assessment
  • The various exceptions and methods of opting out of the new audit rules
  • The legal rights of the 'partnership representative', which will essentially replace the Tax Matters Partner as the person with sole authority to act on behalf of the partnership in matters involving the IRS
  • Areas of the new law which will require more guidance from the IRS
  • Analyzing the new rules in the context of actually addressing the issues in a partnership or operating agreement
Who will Benefit
  • Accountants
  • Attorneys
  • Owners of partnerships and limited liability companies
$300
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Instructor Profile:
Mark chairs the firm's Tax Practice Group and is a member of the firm's mergers and acquisitions practice group. His tax practice is focused primarily on federal taxation of individuals and business entities, including corporations, partnerships and limited liability companies. Significant portions of Mark's practice include:
  • Representing clients in merger, acquisition and divestiture transactions, including significant and complex transactions involving corporations, partnerships, limited liability companies and tax-exempt organizations
  • Advising individuals on succession planning and other tax planning strategies
  • Representing clients in structuring the formation of business ventures using these different types of entities and advising clients on business and tax issues relating to subsequent capital infusions.
  • Advising clients on tax issues involved in complex real estate matters, including tax deferred exchanges and tax credit transactions.
  • Advising clients in or contemplating bankruptcy or other financial restructuring on the tax issues and opportunities presented in these situations.
  • Representing clients in various types of tax controversies, including audits and court proceedings involving complex tax issues at the federal, state and local levels.
  • Working with nonprofit organizations in analyzing and implementing business relationships including mergers and affiliations, and advising on compliance issues with respect to state and federal rules.
Mark earned a J.D. from The Ohio State University Moritz College of Law in 1993. He received a B.A. from Miami University in 1986.
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