The new rules represent a complete overhaul of partnership audit, assessment, and collection procedures. Taxpayers should review and potentially amend partnership agreements before the new rules are scheduled to take effect on January 1, 2018. Participants in M&A transactions involving partnerships should also consider the potential impact of the new rules.

On June 13, 2017, the Internal Revenue Service (“IRS”) re-released proposed regulations (the “Proposed Regulations”) implementing the centralized partnership audit regime enacted into law under the Bipartisan Budget Act of 2015 (the “Budget Act”). The Proposed Regulations are nearly identical to regulations proposed in January of this year (the “January Proposed Regulations”), which were withdrawn as part of a regulatory freeze by the Trump administration.