IRS Form: Final Instructions to Form 8978 on Partner Audit Liability (IRC §6226)

Final instructions to Form 8978, Partner’s Additional Reporting Year Tax, released February 21 to reflect changes to the audit procedures of partnerships under the 2015 BBA. The form is used to compute additional reporting year tax, penalties and interest. Tax code Section 6226 allows a partnership to elect to push responsibility for payment down to the reviewed year partners. Instead of paying the imputed underpayment determined under Section 6221, a partnership may elect to have each reviewed year partner take into account the partner’s share of the adjustments, as finally determined. [Instructions to IRS Form 8978 ...