IRS Re-Releases Proposed Partnership Audit Rules

On June 13, 2017, the Internal Revenue Service (IRS) re-released proposed regulations that repeal the current rules governing partnership audits and replaces them with a new centralized partnership audit regime that generally assesses and collects tax at the partnership level.  The proposed regs provide rules for partnerships subject to the new regime, including procedures for electing out of the centralized partnership audit regime, filing administrative adjustment requests, and the determination of amounts owed by the partnership or its partners attributable to adjustments that arise out of an examination of a partnership.  The proposed regs affect partnerships for tax years beginning after December 31, 2017, and any partnerships that elect application of the centralized partnership audit regime for tax years between November 2, 2015, and January 1, 2018.   The IRS originally released these proposed regulations on January 18, 2017, and withdrew them following the release of a January 20 White House memorandum ordering a freeze on all new and pending regulations.