Practical implications of TEFRA partnership audit rules repeal: Issues to consider now

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August 2016

Overview

Recently released temporary regulations (T.D. 9780) provide guidance for electing to apply the new partnership audit rules for partnership tax years beginning after November 2, 2015. Absent an election of earlier application, the new partnership audit rules take effect for tax years beginning in 2018.

The new rules raise many practical and technical questions that have yet to be answered.  Significant administrative guidance and possibly Congressional action to supplement the new rules are expected.  Given the delayed effective date and need for clarifying guidance, many partnerships have not yet analyzed the significant practical implications of the new rules.  Prior to the effective date, however, partnerships and partners need to respond to the rules in their current form.  We believe that it is advisable to start focusing on the impact of the new rules and plan accordingly.

This PwC Insight takes an in-depth look into what partnerships and their partners should be doing before the new rules take effect.

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Julie Allen

National Tax Services Market Leader and Mergers and Acquisitions Tax Leader, PwC US

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