Source: https://mastroiannilegalblog.wordpress.com/tag/cpar/
Timestamp: 2019-04-26 04:06:02+00:00

Document:
Under the centralized partnership audit regime enacted as part of the Bipartisan Budget Act of 2015, adjustments to partnership-related items are determined at the partnership level under Code § 6225. However, under Code § 6226, the partnership may elect to “push out” the imputed underpayment so that the tax attributable to the adjustments is assessed and collected from the partnership’s partners. The election to “push out” the imputed underpayment under Code § 6226 must be made within 45 days of date on which the final partnership adjustment is mailed by the IRS. The election, once made, may only be revoked with the consent of the IRS.
Last week, the IRS published Form 8988, Election for alternative Payment of the Imputed Underpayment and Form 8989, Request to Revoke the Election for Alternative to Payment of the Imputed Underpayment, to assist taxpayers in implementing Code § 6226.
IRS issues forms to make, and to revoke, partnership audit “push out” election. CheckPoint Daily Updates 2/11/2019. Federal Tax Update.
On August 14th, the IRS released draft Form 8979, Partnership Representative Revocation, Designation, and Resignation. This draft form is provided to implement Internal Revenue Code § 6223 under the 2015 Bipartisan Budget Act, the procedures of which replaced the tax matters partner with the partnership representative.
Bloomberg Law. IRS Form: Partnership Representative Draft Form (IRC § 6223). Dailt Tax Report. August 16, 2018.
Recall that the Centralized Partnership Audit Regime, which became effective January 1, 2018, requires that partnerships, unless they have met the criteria to opt out, must choose a partnership representative who has the sole authority to act for the partnership in the event of an audit.
In early June, I posted here that that the Treasury was considering whether the partnership representative could choose an attorney-in-fact to act on his or her behalf during an audit.
The answer came in the affirmative in final regulations provided on August 6, 2018.
The final regulations also clarified that a partnership may designate itself as its own partnership representative, and that even a disregarded entity can serve as a partnership representative.
Versprille, Allyson, Partnership Reps Can Use Power of Attorney During Audits: IRS. Bloombery Law. Tax Management Weekly. August 13, 2018.
The Centralized Partnership Audit Regime, which became effective January 1, 2018, requires that partnerships, unless they have both met the criteria and followed the procedure to elect out, choose a partnership representative who has the sole authority to act for the partnership in the event of an audit.
Whether or not this chosen partnership representative can then nominate another individual or entity to act for such partnership representative has not yet been addressed by the Treasury.
Stay tuned. I’ll keep you posted.
On February 7, 2018, the Department of the Treasury released an addendum to the 2017-2018 Priority Guidance Plan targeting July as the release date for guidance on 29 regulatory projects to implement the Tax Cuts and Jobs Act.
Despite the reality that many practitioners are operating under their “best guess” of what the final rules will be, a delay in the effective date of CPAR is not expected.
The new Centralized Partnership Audit Regime (“CPAR”) applies to all partnerships (which include LLCs), both existing and new, for taxable years beginning January 1, 2018.
Under CPAR, the IRS is no longer required to determine each partner’s share of the adjustments made to partnership items followed by a separate computational adjustment for each partner. Further, the applicability of any penalty, addition or tax, or additional amount which relates to an adjustment to any such item or share shall also be determined at the partnership level.
There is a new requirement to appoint a partnership representative. This partnership representative has the sole authority to act on behalf of the partnership. All partners and the partnership are bound by the actions of the partnership representative and any final decision. CPAR does not include a statutory right to notice of, or to participate in, the partnership level proceeding for any person other than the partnership and the partnership representative.
CPAR is designed to assist the IRS in auditing large partnerships of 100 members or more. However, the rules catch all such entities, no matter what size, which do not opt out, and certain common types of partners or members are not allowed to opt out. Unfortunately, these partners or members that may not opt out include trusts, LLCs and other partnerships.
For more information, see Internal Revenue Bulletin: 2017-28.

References: § 6225
 § 6226
 § 6226
 § 6226
 § 6223
 § 6223