Proposed Rules Center on Partnership Audit Subsidiary Issue (1)

Nov. 20, 2020, 4:23 PM UTCUpdated: Nov. 20, 2020, 5:30 PM UTC

The IRS proposed several changes to guardrails for a centralized auditing process for partnerships that was enacted by a 2015 budget law.

The agency addresses ambiguities surrounding situations in which a partner of a partnership subject to the new auditing regime is a type of domestic subsidiary 100% owned by an S corporation. Those subsidiaries, known as qualified S corporation subsidiaries, wouldn’t be able to help their partnerships elect out of the centralized auditing process under the proposed rules.

The new package of regulations (REG-123652-18; RIN: 1545-BP01), released Friday, also includes proposed changes to existing final ...

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