The IRS office of Appeals on October 18, 2019, released interim guidance on application of the new Bipartisan Budget Act of 2015 (BBA) partnership audit procedures. The new guidance supplements previous interim guidance AP?08?0319?0005, which was issued on March 25, 2019. The April 25 guidance set procedures for Appeals employees to follow in screening, assigning, and referring BBA partnership cases.
The October 18 guidance includes the following key points:
- Election into BBA Regime. Partnerships with taxable years beginning after November 2, 2015, and before January 1, 2018, which are not automatically subject to BBA procedures, may elect for BBA procedures to apply as follows:
- Within 30 Days of Audit Notification. The partnership can make the election within 30 days of the date the IRS first notifies the partnership in writing that it has been selected for audit. To make the election, either the Tax Matters Partner or an individual authorized to sign the return should complete Form 7036, Election under Section 1101(g)(4) of the Bipartisan Budget Act of 2015.
- Via Administrative Adjustment Request. The partnership can make the election by filing an Administrative Adjustment Request under section 6227.
- Appeal Rights. Whether a partnership elected to be subject to BBA procedures per the above or is automatically covered (for tax years beginning on or after January 1, 2018), the case will have Appeals rights. The following procedures will apply:
- If there is a dispute on a case, the agent will issue a “30-day BBA letter?? (Letter 5891, 30-Day Letter - Bipartisan Budget Act Partnership) for the taxpayer to request an Appeals hearing.
- At least one year must remain on the period of limitations on assessment at the time the protest is received by Appeals; the IRS will use Form 872-M, BBA Consent to Extend Time for Making Adjustments to Partnership-Related Items, if there is less than a year remaining on the period of limitations.
- Notice of Proposed Partnership Adjustment (NOPPA) and Modification.
- Appeals will issue the NOPPA to the taxpayer after the Appeals process.
- The Partnership Representative may request modification of the Imputed Underpayment Amount using Form 8980, Partnership Request for Modification of Imputed Underpayments Under IRC Section 6225(c).
- Appeals will not reconsider a previously appealed issue if the case is returned to Appeals for a modification hearing.
The original memorandum from the IRS is available here. Although many of its provisions relate to internal IRS procedures, the guarantee of Appeals rights should be a relief for taxpayers whose cases may not otherwise get full consideration during the audit.
A New Era of Partnership Representation Before the IRS
Search
Recent Blog Posts
- Surge in BBA Partnership Audits Expected in 2022
- IRS Releases Memo Concerning Access to Administrative File in TEFRA and BBA Examinations
- IRS Provides Penalty Relief for New Capital Reporting Requirements
- IRS Releases Proposed Regulations on Centralized Partnership Audit Regime
- Centralized Partnership Audit Regime Website Launched by IRS
- Partnership Filing Relief
- IRS Issues LB&I Memorandum
- IRS Release Clarifications for Form 8082
- IRS Release Draft Instructions to Form 8978
- IRS Releases Interim Guidance Centralized Partnership Audit Regime
Bios
Archives
- January 2022
- April 2021
- January 2021
- November 2020
- September 2020
- April 2020
- March 2020
- February 2020
- November 2019
- October 2019
- July 2019
- March 2019
- January 2019
- December 2018
- November 2018
- September 2018
- January 2018
- October 2017
- August 2017
- July 2017
- May 2017
- February 2017
- January 2017
- November 2016
- October 2016
- September 2016
- August 2016