Partnerships Need to Consider new U.S. Tax Representative Role

Author(s): Advo​cateDai​ly​.com staff
The fol­low­ing arti­cle first appeared in Advo​cateDai​ly​.com,  Feb­ru­ary 7, 2019.With the recent intro­duc­tion of new part­ner­ship audit rules that set out who can rep­re­sent a busi­ness before the IRS on tax mat­ters, now is the time for part­ner­ships — both U.S. and for­eign — to act proac­tive­ly to ensure they com­ply with the strict require­ments of the new role, U.S. tax attor­ney (NY, DC) Alex­ey Man­a­suev tells Advo​cateDai​ly​.com.

Last August, the IRS final­ized the pro­posed reg­u­la­tions, requir­ing any for­eign or domes­tic part­ner­ship that is sub­ject to U.S. tax, with lim­it­ed excep­tions, to appoint a “part­ner­ship rep­re­sen­ta­tive,” who will be respon­si­ble for com­mu­ni­cat­ing with the IRS on any audit or tax mat­ters, effec­tive from the 2018 tax year.

Part­ner­ships that are required to file their tax returns by March 16, 2019 will be affect­ed by this new regime, and it’s quite a sig­nif­i­cant devel­op­ment

The new role replaces the for­mer “tax mat­ters part­ner” that part­ner­ships were required to appoint in ear­li­er tax years, says Man­a­suev.

“The tax mat­ters part­ner would sign the tax return on behalf of the part­ner­ship, deal with the IRS and oth­er part­ners in case of an audit and oth­er inquiries and mat­ters involv­ing the IRS. Gen­er­al­ly, any­body could have been a tax mat­ters part­ner — it could have been a busi­ness enti­ty, it could have been an indi­vid­ual part­ner,” he adds.

But while the part­ner­ship rep­re­sen­ta­tive’s role is sim­i­lar to the con­cept of tax mat­ters part­ner, Man­a­suev cau­tions that the new regime car­ries much stricter con­di­tions for who can fill the role.To read full arti­cle at Advo​cateDai​ly​.com click here Read Full Arti­cle