New IRS Partnership/LLC Rules Require Your Immediate Action
New rules that change the way that partnership entities and limited liability companies are audited took effect on January 1, 2018. You may have received the legal update we sent on January 2, 2018.
PLEASE READ THIS NOTICE IF YOU ARE A PARTNER, MEMBER, MANAGER, OFFICER, OR DIRECTOR OF A PARTNERSHIP OR LIMITED LIABILITY COMPANY.
- New IRS Audit Rules mean that almost every partnership or limited liability company must take immediate action.
- Almost every existing partnership agreement and LLC operating agreement requires amendment during 2018 to address the New IRS Audit Rules.
- Failure to address the New IRS Audit Rules in your partnership or LLC operating agreement may result in unintended tax and financial consequences, including the following:
- Your partnership or LLC may have to pay tax on IRS adjustments at the highest applicable tax rate when lower individual tax rates might otherwise be available.
- Current partners and members may have to bear the economic consequences of tax items previously attributable to former partners and members.
- Your partnership or LLC and its owners may be bound by unacceptable action or inaction of a “partnership representative” with few options to remedy such action or inaction.
DO NOT WAIT to address these issues at year end as these issues need to be planned for now.
We are happy to assist you. Please contact either your primary attorney at Chambliss or David W. Hunter, Chambliss tax attorney, to obtain additional information to help you determine how the New IRS Audit Rules apply to your partnership or LLC and how best for you to deal with the New IRS Audit Rules. We are happy to work with your accounting or tax professional.