As we
previously reported, the CARES Act provides certain retroactive
tax benefits. Perhaps most notably for partnerships, for 2019 and
2020, the CARES Act revises the business interest deduction
limitation under section 163(j) to allow taxpayers (including
partnerships) to deduct business interest expense up to the amount
of their business interest income plus 50% of EBITDA (instead of
30% under pre-CARES Act law).
However, since 2018, most partnerships have been prohibited from
filing amended tax returns, which limits their ability to take
advantage of the benefits that the CARES Act might otherwise
confer.
To rectify this issue, the IRS released Revenue Procedure
2020-23, which generally allows these partnerships to file amended
tax returns for tax years beginning in 2018 and 2019 before
September 30, 2020.
