Partnership Representative

A law intended to make it simpler for the Internal Revenue Service to audit partnerships may turn out to be problematic for the agency to administer, the IRS chief said.  Commissioner John Koskinen said it’s possible that taxpayers and the agency might be worse off under the new system because “nobody quite asked, ‘Hey, would this really work?’?? before the legislation was passed.

The audit provisions, which allows the IRS to collect tax at the partnership-entity level rather than from individual partners, was included in the Bipartisan Budget Act at the last minute because it was projected to raise revenue. Tax lawyers and certified public accountants have complained that the law doesn’t work, particularly for large, complex partnership structures. Tax groups have pushed Congress to make technical corrections to the law.

“I will tell you the statute has turned out to be more complicated, rather than less,?? Koskinen said today at the American Institute of CPAs National Tax Conference. “It’s a challenge.??

Excerpt taken from the article “IRS Chief Skeptical of New Audit Regime for Partnerships?? by Colleen Murphy and Laura Davison for Bloomberg BNA.