Partnership Representative

On November 28, 2018, the Internal Revenue Service (the “IRS??) published a draft version of the instructions for Form 8979, Partnership Representative Revocation, Designation, and Resignation Form (click here).  When read in conjunction with the previously published draft of Form 8979, taxpayers now have a clearer idea as to the process for how to change a previously selected partnership representative or designated individual. 

Per the instructions, only the partnership or the partnership representative may file a Form 8979.  Additionally, both the form and the instructions highlight the requirement that the partnership representative must have a substantial presence in the United States.  The form itself requires that the partnership representative and/or the designated individual list a United States address, telephone number, and taxpayer identification number; the three main requirements for demonstrating that an individual or entity has a substantial presence in the United States.

In accordance with the previously published partnership representative regulations, there are three situations in which the IRS will accept a Form 8979 designation or revocation.  The first occasion is with an administrative adjustment request in which the partnership is also making a substantive change to a filing for that tax year.  The second occasion is once a partnership receives a notice of selection for examination or a notice of administrative proceeding.  The third occasion is if the IRS notifies a partnership that it has failed to properly make a partnership representative designation.  Once a partnership receives notification from the IRS that it does not have a properly designated partnership representative, the partnership must submit a Form 8979 within 30 days or risk having the IRS designate a partnership representative on its behalf. 

With each new publication, taxpayers gain more insight into how the IRS will administer the new audit process.  While Form 8979 and its instructions are still in draft form, the IRS is likely to publish final versions in the near future, as 2018 is the first tax year in which partnerships will be subject to the new partnership audit regime.  The attorneys at Caplin & Drysdale are here to help with any partnership representative and partnership audit questions.