Time to Amend Old Operating Agreements: January 1, 2018 Audit Rules in Effect

Partnership audits might sound like a rather boring topic, but new rules now in effect make auditing partnerships much easier for the IRS and as such should be an area of concern for businesses.  We have previously published a couple of articles regarding the audit rules: " Do We Really Have to Change Every Operating Agreemen? The New Partnership Audit Rules" and " Estate Planning With Partnerships: Important New Considerations."  The Bipartisan Budget Act of 2015 and the Protection of Americans for Tax Hikes Act of 2015 created new audit rules replacing the current TEFRA regime beginning January 1, 2018.  The new default rule is that if a partnership (or an LLC, LP, etc. taxed as a partnership) is audited, there will be a partnership level determination, assessment and collection.  As we also indicated, the problem with this default regime is what happens if you currently have different partners than who you had during the audited year.  Also problematic is if