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The U.S. Bipartisan Budget Act 2015 introduced a range of legislative changes in relation to the audit of partnerships. Under this legislation and effective for tax years beginning January 1st 2018, the U.S. Internal Revenue Service (“IRS”) requires that a Partnership Representative (“PR”) be appointed to each U.S. domestic or foreign partnership that is required to file a partnership return (Form 1065). The purpose of the PR is to manage the audit process with the IRS.

Partnership Representative Substance Requirements

The legislation requires that the PR have a substantial presence in the USA. A substantial presence requires the PR to:

  • Have a U.S. taxpayer identification number;
  • Have a U.S. telephone number and a U.S. street address;
  • Be available to meet in person with the IRS at a reasonable time and place as necessary.

Whilst it is not explicitly stated in the legislation that the PR should be U.S. resident, the practical implications of the
substantial presence requirements create little opportunity for this role to be undertaken by an individual outside of the USA.

The Role of the Partnership Representative

The key tasks performed by the PR include:

  • Acting as a direct contact with the IRS in the event of an audit;
  • Serving as the named individual on all partnership tax returns;
  • Completing all necessary duties as required by U.S. tax law in the case of an audit;
  • Consulting with the General Partner of the partnership during the audit and working with each partnership in relation to any documentation, filings or requests.

You can download a pdf version of our KB Associates U.S. Partnership Representative Services brochure

KB Associates

KB Associates offers the provision of a suitably qualified person, Neal Berkowitz to meet the substantial presence requirements to perform the PR role. If you wish to discuss any aspects of this service, please contact Neal Berkowitz at neal.berkowitz@kbassociates.ie or on 001 917 257 4103.

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