New Era For Partnership Representatives Amid IRS Focus

With the annual deadline for US partnerships to appoint a US-based partnership representative fast approaching, recent regulatory guidance from the IRS outlines its increased focus on tax abuse through partnership arrangements, highlighting the benefits of appointing a partnership representative with the experience and capability to successfully deal with an IRS audit.

Complex US Partnerships Under Scrutiny

A partnership representative may be required to engage with the IRS and manage the audit process, which requires an in-depth understanding and familiarity with its procedures.

Earlier this year, the IRS announced it has accelerated efforts to stop tax abuse by partnerships through transactions lacking economic substance, establishing new teams to expand audits of partnerships, which will be held to a higher standard than ever before, with complex partnership arrangements facing the greatest scrutiny.