New Audit Rules for Partnerships

By:  Amanda Wilson

Last week, President Obama signed into law the Bipartisan Budget Act of 2015.  Buried in this budget bill is an entirely new procedure for how partnerships are audited.  Specifically, it would repeal the  much maligned TEFRA (1982 Tax Equity and Fiscal Responsibility Act) rules.

Why should this matter to you?  Many businesses in the senior living area use partnerships or joint ventures for their deals.  If you do so, you are likely to be subject to these new rules.  The new rules go into effect for partnership tax years beginning after December 31, 2017, which sounds like a long time from now.  However, you should start reviewing your existing partnership or joint venture agreements now to see if they need to be amended, and you should consider these new rules as you enter into agreements for new deals.  You do not want to be caught off guard.

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