Understanding the BBA Partnership Audit Rules 2025
- PLI New York, 1177 Avenue of the Americas
-
Tuesday, April 1, 2025 9:00 AM
- 5:00 PM EST
Kate Kraus is the co-chair of PLI’s Understanding the BBA Partnership Audit Rules 2025 on April 1, 2025, and she will speak at the following sessions.
Click here for additional information and to register.
Sessions
BBA Partnership Audit Rules – Overview, the Default Rule, and the Imputed Underpayment
The BBA provides a centralized audit regime under which adjustments are made to partnerships. This panel will provide an overview of the BBA and its scope, focusing on the “default rule” – i.e., what happens when the partnership and the partners do not take any special steps or make any elections, explain the types of adjustments that may be made under the BBA, the calculation of the imputed underpayment, and the treatment of adjustments that do not affect the calculation of the imputed underpayment.
Other Choices under the BBA Partnership Audit Rules – Modification and Push Out Election
The BBA provides a partnership with many options to resolve an adjustment. Two important options are the modification procedures under Section 6225(c) and the Section 6226 push out election. This panel will provide an in-depth discussion of the ways in which these options differ from the default rule and from each other, including procedural issues and practical considerations.
BBA Partnership Audit Rules – Controversy and Procedure
The BBA was enacted to make it easier for the IRS to assess and collect tax attributable to adjustments to partnership-related items. As a result, it has created new procedural rules for partnership audits. This session will discuss the steps in a BBA audit, the role of Appeals, practical challenges for partnership representatives, key deadlines for the IRS, how interest calculations may be larger under the BBA, when penalties may apply and what penalty defenses are available.
BBA Partnership Audit Rules in the Transactional Context
It is crucial to take the BBA into account in the transactional context, when a partnership is formed or dissolved, when a partner joins and leaves a partnership, and in partnership mergers, divisions, and other transactions. Under the BBA, the partnership representative and designated individual are generally the only persons allowed to act on behalf of the partnership and its partners; changes to these designations are only allowed in limited situations. In addition, the BBA affects the amount at risk in the event an adjustment is made and the party who bears that risk. Moreover, it is not always advantageous, and not always possible, to make a Section 6226 push out election. Transactional planning must therefore take into account the possibility that such an election will not be made or might not be valid. This session will address BBA issues in the transactional context, including indemnities for the imputed underpayment, and the application of the BBA when a partnership liquidates.
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