BBA Partnership Audit Rules and Procedures

Categories: IRS ORL FL
Wishlist Share

About Course

This course is a practice-focused, four-module program on the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015 (BBA), which replaced the TEFRA and electing-large-partnership audit rules for partnership tax years beginning after December 31, 2017. It goes beyond a general overview of the regime to build the practical skills a preparer needs at the desk: determining whether a partnership can and should elect out of the centralized regime, correctly designating and understanding the authority of a Partnership Representative, calculating an imputed underpayment and pursuing available modifications, deciding between paying the imputed underpayment at the partnership level or pushing the adjustments out to reviewed-year partners, and using an Administrative Adjustment Request to correct a previously filed return under the regime’s own rules rather than an ordinary amended return.

This course assumes general familiarity with individual and partnership federal income tax preparation. Course content is grounded in IRC §§6221 through 6241 as enacted by the Bipartisan Budget Act of 2015 (Public Law 114-74) and amended by the Protecting Americans from Tax Hikes Act; Schedule B-2 (Form 1065) and its instructions; Form 8979 (Partnership Representative designation); Form 8986 and Form 8985 and their instructions; and the current Instructions for Form 1065. Where a rule differs from the former TEFRA regime — particularly partner participation rights and the identity and authority of the partnership’s designated representative — the course states the distinction explicitly rather than assuming prior TEFRA familiarity carries over unchanged.

Show More

Related Courses

What Will You Learn?

  • Determine whether a partnership is eligible to elect out of the centralized partnership audit regime under IRC §6221(b), correctly count partners for the 100-or-fewer limit (including counting each S corporation partner's own shareholders), and identify which partner types disqualify the election.
  • Correctly designate a Partnership Representative on Form 1065, explain the sole authority the Partnership Representative holds to bind the partnership and its partners, and distinguish this role from the former TEFRA Tax Matters Partner, including the absence of an independent partner participation right, subject to participation permitted by the IRS.
  • Calculate an imputed underpayment under IRC §6225, correctly netting partnership adjustments by §702(a) category and applying the highest applicable rate, and apply the available modification procedures under §6225(c) to reduce it.
  • Apply the push-out election under IRC §6226, including the 45-day election deadline measured from the notice of final partnership adjustment, the 60-day Form 8986 furnishing deadline, the consequences of missing either deadline, and the additional 2-percentage-point interest rate that applies to a reporting-year partner's additional tax.
  • Apply the Administrative Adjustment Request procedure under IRC §6227 to correct a previously filed partnership return within the regime's own 3-year window, and correctly determine whether an AAR adjustment is handled at the partnership level or must flow through to the reviewed-year partners.

Course Content

Module 1 — The Centralized Partnership Audit Regime
This module establishes which partnerships are subject to the centralized audit regime enacted by the Bipartisan Budget Act of 2015 and how a partnership elects out of it under IRC §6221(b). You will learn the closed eligible- and disqualifying-partner-type lists, the additive (not substitutive) way an S corporation partner's own shareholders are counted toward the 100-partner limit, and the sole authority — and substantial-presence requirements — of the Partnership Representative who replaced the former TEFRA Tax Matters Partner.

  • The Centralized Partnership Audit Regime

Module 2 — Calculating and Modifying the Imputed Underpayment
Building on Module 1, this module works through how an imputed underpayment is actually calculated when a partnership examination produces an adjustment: netting by §702(a) category, applying the highest §1 or §11 rate by default, and the 270-day window to request a modification under §6225(c). It also covers the narrower rule for an adjustment that produces no imputed underpayment at all, and the precise, easy-to-conflate definitions of reviewed year and adjustment year.

Module 3 — The Push-Out Election
This module covers the push-out election under IRC §6226 — the alternative to having the partnership itself pay the imputed underpayment. You will learn the separate 45-day election deadline and 60-day Form 8986 furnishing deadline, how a reviewed-year partner reports an aggregate correction amount, the additional 2-percentage-point interest rate that applies, and why penalties travel with the adjustment regardless of which payment path is chosen.

Module 4 — Administrative Adjustment Requests and Practitioner Compliance
The final module addresses the Administrative Adjustment Request procedure under IRC §6227 — how a partnership corrects a previously filed return on its own initiative, within a 3-year window measured from the later of two dates. You will learn why an AAR adjustment that produces no imputed underpayment cannot simply stay at the partnership level the way an equivalent examination-context adjustment can, and the module closes by building a full practitioner compliance timeline spanning the entire centralized regime.

Final Assessment – BBA Partnership Audit Rules and Procedures
You have completed a comprehensive review of the topics presented throughout this course and are now prepared to demonstrate your understanding of the key concepts. The following final examination assesses your knowledge of the material covered in all four modules. A passing score of 70% is required to successfully complete the course.

Scroll to Top