Bradley Partner Bruce Ely Quoted in Bloomberg BNA on Uncertainty of New Federal Partnership Audit Rules

Bloomberg BNA

Media Mention

State and Local Tax (SALT) attorney Bruce Ely was quoted in Bloomberg BNA on the uncertainty of new federal partnership audit rules as a result of the November election. The new federal regime, signed into law under the Bipartisan Budget Act of 2015, modified rules governing federal audits of partnership entities. The default regime provides for assessment and adjustments at the entity level—rather than among individual partners—absent an election that would transfer liability to the partners. However, the rules may not have effect if there is a federal tax overhaul.

Ely emphasized the importance of revising every partnership and LLC agreement to reflect the new rules—particularly the rights, responsibilities and restrictions for the partnership representative.

In addition, Ely encouraged states to collaborate on a common approach—although, he and several practitioners have advised that states should move slowly on taking action pending administrative guidance and legislative corrections from the federal level. A technical corrections bill is pending, but it's unlikely to pass this year.

“Never let a good crisis go to waste,” Ely said—invoking a line from Chicago Mayor Rahm Emanuel (D)—meaning that states should work toward uniform language and a model revenue agent report (RAR) statute in response to the federal regime.

The complete article, “New Federal Partnership Audit Rules Not a Certainty,” appeared in Bloomberg BNA on December 9, 2016. (login required)