Can Your US Partnership Representative Handle An IRS Audit?

Since the Bipartisan Budget Act of 2015 imposed new rules on US partnerships for tax filings, the annual requirement to appoint a US-based partnership representative is now well understood, having been in place for the past four tax years. Selecting a US partnership representative, however, is more than a standard box checking exercise. Unforeseen circumstances may require the partnership representative to engage with US tax authorities and, in the case of an audit by the Internal Revenue Service, the partnership representative will need to manage this critically important process.

New partnerships looking to make this election for the 2022 tax year should appreciate that while the regulations state that a partnership representative must have a substantial presence in the US and be contactable by the IRS, this alone may not be sufficient to successfully assist in navigating certain events such as an IRS audit. Selecting a partnership representative with