The IRS, after pulling back a version in January in light of President Trump’s executive order limiting the issuance of new regulations, has finally released the important proposed guidance on the implementation of the revised partnership audit regime enacted as part of the Bipartisan Budget Act of 2015. This version was published in the Federal Register on June 14, 2017. [REG-136118-15].
This second pass is little changed from the version the IRS was set to release in January of 2017. Aside from fixing minor typographical errors in the original, this version removes a single example that dealt with the imputed underpayment and added some additional discussion in the preamble of the issues the IRS continues to consider regarding tiered partnerships and these regulations.
When the original, “not quite” proposed, regulations were issued in January, the items in those regulations were discussed on this site in the post IRS Releases, Then Pulls Back, Proposed Regulations Implementing BBA Partnership Audit Regime (January 27, 2017). We also provided an analysis of those regulations (Analysis of Not Quite Proposed Regulations for BBA Partnership Audit Regime) which, due to the limited changes in the final regulations, remains useful aside from Example 3 for the imputed underpayment on page 31 of that document. That example is not found in the version that was printed in the Federal Register.
As well, the audio and video presentation posted to this site for the week of January 30, 2017 discusses these regulations in detail (2017-01-30 Not Quite Proposed Partnership Audit Regulations, January 27, 2017). The audio and video there provides a 35-minute summary of these proposed rules.