IRS and Treasury's 2016-2017 Business Plan includes new and previously mentioned partnership items

23 August 2016

Treasury and the IRS released the 2016-2017 priority guidance plan (also known as the business plan) listing regulatory and administrative guidance on which the government expects to work in the next year. The 2016-2017 business plan contains 281 projects dealing with tax topics affecting individuals, corporations, charities, international transactions and employee benefit plans.

In addition to the items on this year's plan, the Appendix lists the more routine guidance that is published each year. Treasury intends to update and republish the Priority Guidance Plan periodically to reflect additional guidance that it intends to publish during the plan year. The periodic updates allow flexibility throughout the plan year to consider comments received from taxpayers and tax practitioners on additional projects and to respond to developments arising during the plan year.

The chart below lists the partnership items to which the government has attached high priority for the period beginning July 2016 through June 2017. Items not identified as "new" are carryovers from last year's plan.

"Partnerships" agenda items for 2016-2017

Code Section	Type	Abstract
337(d)	Final Regulations	Final regulations on partnership transactions involving a corporate partner's stock or other equity interests. Final and temporary and proposed regulations were published on June 12, 2015.
469(h)(2)	Final Regulations	Final regulations on limited partners and material participation. Proposed regulations were published on November 28, 2011 (see Tax Alert 2011-2056).{}
514(c)(9)	Regulations	Regulations on the fractions rule in Section 514(c)(9).
704(b)	Guidance — not specified	Guidance on targeted capital accounts under Section 704(b).
704(c)	Regulations	Regulations on updated securities partnership aggregation rules under Section 704(c).
704, 707, and 721	Final Regulations	Final regulations under Sections 704, 707, and 721 on management fee waivers. Proposed regulations under Section 707 were published on July 22, 2015.
704, 734, 743, and 755, as amended by the American Jobs Creation Act of 2004	Final Regulations	Final regulations on the disallowance of certain partnership loss transfers and no reduction of basis in stock held by a partnership in a corporate partner. Proposed regulations were issued on January 16, 2014.
707 and 752	Regulations	Regulations under Section 707 on disguised sales of property and under Section 752 on a partner's share of liabilities. Proposed regulations were published on January 30, 2014.
732(f)	Final Regulations	NEW: Final regulations under Section 732(f) regarding aggregation of basis for partnership distributions involving equity interests of a partner. Proposed regulations were published on June 12, 2015.
751(b)	Final Regulations	Final regulations on unrealized receivables and inventory. Proposed regulations were published on November 3, 2014.
752	Final Regulations	Final regulations on allocating partnership liabilities under the related person rules. Proposed regulations were published on December 16, 2013.
761 and 1234	Final Regulations	Final regulations on the tax treatment of noncompensatory partnership options. Proposed regulations were published on February 5, 2013.
7704(d)(1)(E)	Final Regulations	Final regulations regarding qualifying income for publicly traded partnerships. Proposed regulations were published on May 6, 2015.
7704(d)(1)(E)	Guidance — not specified	NEW: Guidance under Section 7704(d)(1)(E) regarding qualifying income derived from fertilizer for publicly traded partnerships

Other items on the business plan that are not under the "Partnerships" heading but would likely implicate partnership issues include:

1. Guidance on transfers of property to partnerships with related foreign partners and controlled transactions involving partnerships. Notice 2015-54 was released on August 6, 2015.

2. Guidance under Section 166 on the conclusive presumption of worthlessness for bad debts. Notice 2013-35, which requested comments on the existing rules, was published on June 10, 2013.

3. Guidance concerning the interaction of the rules in Section 50(d)(5) and subchapter K. Temporary regulations were released on July 21, 2016.

4. Guidance regarding material participation by trusts and estates for purposes of Section 469.

5. Final regulations under Section 7701 regarding series LLCs and cell companies. Proposed regulations were published on September 14, 2010.

6. Guidance under Section 2704 regarding restrictions on the liquidation of an interest in certain corporations and partnerships. Proposed regulations were released on August 2, 2016.

7. Regulations regarding publicly traded partnerships under Section 1446 and Treas. Reg. Section 1.1446-4.

8. Guidance under Section 956 on the treatment of loans to related foreign partnerships.

9. Guidance under Section 864 implementing Revenue Ruling 91-32 (which provides for look-through treatment for gain on certain partnership interest sales by a foreign person).

10. Final regulations under Section 704(b) on the allocation by partnerships of foreign income tax. Temporary and proposed regulations were published on February 4, 2016.

11. Guidance under Section 901, including on the allocation of foreign tax imposed on disregarded entities and partnerships.

12. Guidance regarding partnership audit and adjustment procedures under TEFRA and the Bipartisan Budget Act of 2015. Temporary and proposed regulations regarding electing into these rules were released August 4, 2016.

13. Guidance on the application of Reg. Section 1.267(b)-1(b) to partners and partnerships.

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Contact Information
For additional information concerning this Alert, please contact:

Partnerships and Joint Ventures Group
• Jeff Erickson	(202) 327-5816
• Jorge Sandoval	(202) 327-7783
• Bryan A. Rimmke	(202) 327-6781

Document ID: 2016-1444