Beginning January 1, 2018 New Partnership Audit Rules will take effect for all entities taxed as partnerships. While there is still a lot of uncertainty surrounding these rules, all entities, such as general partnerships, limited partnerships, and limited liability companies (LLCs), taxed as partnerships and their owners should review and amend their partnership agreements or operating agreements as soon as possible in preparation for the new rules.
One change is the new position known as the partnership or company representative. The company is represented in all audits and litigation only by its company representative. The other Members or Partners have no right to receive notice of, participate in, or challenge the final results of a tax proceedings. If the company fails to identify the company representative, the IRS has the power to appoint the representative.
If you are already a client of Hallock & Hallock, we will be reaching out to you in the coming weeks to discuss the need for amending your partnership or operating agreement. If you are not currently a client and need help determining whether or not an amendment is needed in your situation, please feel free to contact us or another a qualified attorney or accountant who can assist you in making this determination.