MFA Submits Comments to Treasury and IRS on Implementation of Partnership Audit Regime

On August 14, MFA submitted a comment letter to the Department of the Treasury and the Internal Revenue Service on the proposed implementation of the new statutory partnership audit regime. In the letter, MFA encouraged Treasury and the IRS to, among other things: (1) provide a framework to permit tiered partnerships to make the reporting election provided in the statute; (2) provide symmetrical adjustments for taxpayer overpayments and underpayments; and (3) not to impose penalties based on an imputed underpayment at the partnership level, which could result in penalties being applied even if no taxes are actually owed to the government. MFA also supported several provisions in the proposed rules, including proposals that permit partnerships to make modifications to imputed underpayments for upper-tier partners and provide partners with basis adjustments when a partnership elects to pay tax following an audit.