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ARTICLE · 04 APRIL 2018

Partnership Audit Rules Clarified By The Consolidated Appropriations Act

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Technical corrections to the partnership audit rules were included in the 2018 Consolidated Appropriations Act signed by President Trump on March 23rd.

United StatesAccounting and Audit
Sloane Jumper Hankins
Sloane Jumper Hankins
Randall D. McClanahan
Randall D. McClanahan
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Technical corrections to the partnership audit rules were included in the 2018 Consolidated Appropriations Act signed by President Trump on March 23rd (the "Appropriations Act").  These corrections clarify certain provisions of the centralized partnership audit rules that were passed as part of the Bipartisan Budget Act of 2015, but were only effective as of January 1, 2018.

These corrections are briefly summarized as follows:

  1. Scope of Items- Current law provides that the audit rules apply to adjustments to "partnership income, gain, loss, deduction and credit." The revisions substitute the phrase any "partnership-related item."  A "partnership related item" is defined in amended Section 6241 as "any item that is relevant in determining the income tax liability of any person, without regard to whether the item or amount appears on the partnership's tax return." The effect of this revision is to broaden the applicability of the partnership audit rules to items

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