IRS Partnership Audits: 5 Must-Dos In 30 Days

With the IRS laser-focused on enforcement, many partnerships will find themselves subject to their first IRS audits under the new procedurally complex partnership audit rules. Under these rules, the default is that the partnership pays an entity-level tax called an "imputed underpayment" (IU) on any adjustments. This means, unless certain steps are taken, the current partners would bear the tax even if they weren't partners for the year under audit. To navigate these complex rules and ensure the correct tax is paid by the correct partners, the partnership and its representative must make a number of time-sensitive strategic decisions.

Here are the five time-sensitive actions that a partnership or its representative should take within 30 days of receiving the notice of selection for examination (NOSE):