On January 18, 2017, the IRS released proposed regulations (REG-136118-15) on implementing the new partnership audit regime enacted by the Bipartisan Budget Act of 2015 (BBA). The new regime allows the IRS to assess and collect tax at the partnership level under new centralized audit procedures.

According to the regulations' preamble, the proposed regulations "provide rules for partnerships subject to the new regime, including procedures for electing out of the centralized partnership audit regime, filing administrative adjustment requests, and [determining] amounts owed by the partnership or its partners attributable to adjustments that arise out of an examination of a partnership." The regulations also "address the scope of the centralized partnership audit regime and provide definitions and special rules to govern its application, including the designation of a partnership representative."

The proposed regulations would affect partnerships for tax years beginning after December 31, 2017, and any partnerships that elect to apply the centralized partnership audit regime for tax years beginning after November 2, 2015 and before January 1, 2018. A Tax Alert is forthcoming.