While the news is filled with the ongoing tax reform activity in
Congress, there is one tax change that is already in place to take
effect January 1, 2018 – the repeal and replacement of the
tax audit regime for partnerships. For all tax years
beginning on or after January 1, 2018, the existing TEFRA audit
regime is being replaced with a new audit
regime. The tax matters partner is being replaced
with a partnership representative – and the partnership
representative is the only person that the IRS will deal with when
auditing the partnership. The partnership representative has
the sole authority to participate in the audit and bind the
partnership when it comes to dealing with the IRS, so it will be
important to get the selection of your partnership representative
correctly. Once chosen, the partnership representative
cannot be changed for a tax year without the IRS's consent.
In addition, if there is a partnership audit, any adjustments
will be made at the
