With a new year comes new tax rules that have significant impacts on your operating agreements and LLCs. If you haven’t updated your operating agreement for some time or if you are entering or exiting an LLC, the Bipartisan Budget Act of 2015 (the “BBA”) has significant impact for the former “tax matter partner” provisions. These BBA provisions took effect January 1, 2018 and repeal the TEFRA and ELP procedures and applies to all partnerships that file a Form 1065 return. In implementing these rules, IRS hopes to increase audit activity and make it easier to assess deficiencies for unpaid taxes to your partnerships. It is critical to understand the new rules in order to better protect yourself and your partnership in future audit.
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