The Internal Revenue Service (IRS) has attempted to simplify the process used to audit partnerships. As discussed in a previous post, the rules that govern partnership audits changed as of January 1, 2018. However, the IRS does not require all partnerships to follow these new rules.
As of January 1, 2018, the rules that govern audits of partnerships have changed. In the past, the Tax Equity and Fiscal Responsibility Act (TEFRA) applied to these audits. The law required the Internal Revenue Service (IRS) to allocate the audit adjustments within partnerships amongst the partners.
Whether it is a financial transaction, an investment or real estate purchase, nearly every transaction is taxed. Tax planning involves mitigating risk and liabilities to find the most economically viable business solution. Tax law is highly specialized and failing to consider tax consequences is detrimental to business growth and development.