Recent IRS audit rules may affect how partnerships account for tax underpayments

KPMG reports on what changes partnerships may need to make to their financial reporting beginning in 2018. Recent IRS rules for audits of partnerships may change the accounting for tax underpayments

Applicability

Bipartisan Budget Act of 2015

• All US partnerships and their partners

Relevant dates

• Tax years beginning after December 31, 2017

Key impacts

New rules for audits of partnership intend to ease the administrative burden placed on the IRS when it collects underpayments. The rules:

• Generally allow the IRS to collect underpayment from the partnership
• May change accounting for tax underpayments by partnerships
  

Report contents

• Applicability
• Key facts and impacts
• Who accounts for potential tax obligations?
• Flow chart on accounting and disclosure of the potential tax obligations