Partnerships and the BBA regime
The centralized partnership audit regime that applies to partnership returns for tax years beginning after 2017: the partnership representative, the imputed underpayment and how to reduce it, the push-out election, administrative adjustment requests, and the TEFRA rules that still govern older years.
The BBA centralized partnership audit regime: what practitioners need to know
Who the centralized partnership audit regime covers, how an exam moves from Letter 2205-D to the FPA, and where the partnership, its representative and its partners fit.
Electing out of the BBA regime under IRC 6221(b)
The 100-statement test, eligible and ineligible partners, the timely-return requirement, partner notice, and what the IRS does when it finds an election out invalid.
The partnership representative and designated individual under the BBA
Sole authority, substantial presence, designated individuals for entity PRs, changing or resigning on Form 8979, what happens when no PR is in effect, and powers of attorney.
The imputed underpayment: how the IRS computes it
The seven-step IU computation from IRM 4.31.9.9.2, with the IRS's own worked example, the netting limits, and what happens to adjustments that do not produce an IU.
Modification requests under IRC 6225(c) and Form 8980
The types of modification, the 270-day period after the NOPPA, partner amended returns and the alternative procedure, rate and tax-exempt modifications, and how BBA Operations and Appeals decide.
The push-out election under IRC 6226 and Form 8988
The 45-day election, Form 8988 contents, the 60-day deadline for Forms 8985 and 8986, how reviewed-year partners compute tax and interest, revocation, and what invalidates an election.
Administrative adjustment requests (AARs) under the BBA
When a BBA partnership can file an AAR, who signs it, electronic versus paper filing, the required IU computation, paying the IU or pushing out, Forms 8985 and 8986, and how examiners treat AARs.
The BBA exam, step by step: Letter 2205-D, the NAP, the NOPPA and the final partnership adjustment
Each notice in a BBA exam, when the IRM says it goes out, who receives it, what the partnership can do at each point, and how cases move from the field to Technical Services, Appeals and BBA Operations.
The BBA adjustment period under IRC 6235, and how it is extended
The three IRC 6235(a) dates, what resets them, the special rules for fraud, no return and substantial omission, Form 872-M extensions, and the related partner-level and collection periods.
Penalties in a BBA examination
Penalties computed on the imputed underpayment, the IRM's ordering rules for negative adjustments, the substantial understatement test, reasonable cause at the partnership level, push-out penalties, and the penalties that sit outside BBA.
Tiered partnerships and pass-through partners under the BBA
What a partnership, S corporation or trust that receives a Form 8986 must do, the deadline, how to compute and pay an IU instead of pushing further, modification through the chain, and the consequences of doing nothing.
Collecting a BBA imputed underpayment, and when partners become liable
When the IU can be assessed, how to pay it, the higher interest rate after notice and demand, the two-year IRC 6232(f) assessment against partners, and what happens when a partnership ceases to exist.
TEFRA partnership procedures for pre-2018 years
Which pre-2018 partnerships are TEFRA, the tax matters partner and notice partners, the NBAP and 45-day rule, settlements and consistent settlement, the FPAA petition periods, and the IRC 6229 statute.
BBA partnership cases in Appeals and Tax Court
When a BBA case can go to Appeals, what Appeals hears and how often, the NOPPA and FPA Appeals issues, the 90-day petition, Tax Court's BBA rules, and deposits for district court or Claims Court.
Amended return or AAR: which a partnership can file
The IRC 6031(b) bar on amending K-1s, who can still amend (elected-out partnerships, superseding returns, IRS guidance), how a BBA partnership corrects a return, and what partners can do on their own.
Forms 8985 and 8986: pass-through statements and partner adjustments
What the two BBA push-out forms do, who prepares them, the 60-day and extended-due-date deadlines, electronic versus fax submission, the December 2024 revisions, TIN corrections, and partner reporting on Form 8978.
Forms, tools and templates
Form 8082
Both uses of Form 8082: a partner's or shareholder's notice of inconsistent treatment, and a BBA partnership's administrative adjustment request, line by line.
Form 8988
The push-out election a BBA partnership makes within 45 days of the FPA: each line, the required partner schedule, electronic submission and how BBA Operations reviews it.
Form 8986
The statement that pushes BBA adjustments to partners: each part and column of the December 2024 revision, due dates, corrections and how recipients report it.
Form 8985
The summary form that transmits Forms 8986 and reports pass-through partner payments: tracking numbers, signatures, due dates, and the pay-or-push decision.
Form 8980
The request to reduce a BBA imputed underpayment: the 270-day window, each item and modification type, AAR limits, and how BBA Operations decides.
Form 8979
The form for designating a new partnership representative or resigning: when it can be filed, who signs, the substantial presence test and how examiners validate it.
BBA imputed underpayment
Groups and nets partnership adjustments the way Treas. Reg. 301.6225-1 does, applies the highest rate and credits, and shows the effect of modifications.
AAR (Form 8082) checklist
Each step a BBA partnership needs for a valid AAR: timing, who signs, the imputed underpayment computation, push-out statements and payment.
Push-out (8988 / 8986) checklist
The 45-day election and 60-day statement deadlines, with each required item from Treas. Reg. 301.6226-1 and 301.6226-2 and the IRS review steps.