Starting in 2018, the rules regarding the partner that would represent the Partnership before the IRS and how the IRS would assess any audit adjustments were changed. Under the old rules, a partnership, subject to the rules for consolidated audit proceedings in sections 6221 through 6234, would designate a partner as the Tax Matters Partner for the tax year for which the return is filed. The designated tax matter partner was required to be a general partner, and in most cases, also must be a U.S. citizen. For a limited liability company (LLC), only a member manager of the LLC was treated as a general partner. Under the pre-2018 rules, any audit adjustment were passed through to the partners and if necessary any collections would take place at the partner level.
For tax years beginning on or after January 1, 2018, the designation of tax matters partner was changed to a "partnership representative". Under the new rules, the IRS will first assess and collect any audit adjustment from the partnership, rather than the partners.
Under certain circumstances, the partnership can elect to opt out of the new requirements. See the Form 1065 instructions for more information.
To designate a Partnership Representative, from the Main Menu of the tax return (Form 1065) select:
- Schedule B - Other Information
- Additional Other Information
- Partnership Representative Information
- Is the Partnership Representative an Individual? - Answer Yes or No.
- If Yes, enter the representative's name, social security number, phone number, and address.
- If No, enter the entity's name, employer identification number, phone number, and address, along with contact information for a specific individual at the entity.
NOTE: This is a guide on entering the Partnership Representative into the TaxSlayer Pro program. This is not intended as tax advice.