State and Local Tax (SALT) attorney Bruce Ely was quoted in Bloomberg BNA on instructions from the White House to withdraw regulations that would provide administrative guidance on the new federal partnership audit regime. The proposed regulations detailed several administrative procedures that would have provided states and practitioners with some clarity on the new rules, including filing requirements, processes for determining the amount owed to the IRS, and steps for electing out of the regime.
Unlike the Section 385 debt-equity rules, “most of us don't expect the partnership regs to be permanently suspended nor do we see any groundswell of support in Congress for repealing the statute,” said Ely. Having reviewed the proposed regulations, Ely doubts “that Treasury will make any material changes to them before they're reissued—especially before the comment period has even begun. So it's more about when they'll be reissued.”
The complete article, “Freeze of Partnership Audit Rules Delays Clarity for States,” appeared in Bloomberg BNA on January 25, 2017. (login required)