81 FR 51835 - Election Into the Partnership Audit Regime Under the Bipartisan Budget Act of 2015

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 81, Issue 151 (August 5, 2016)

This document contains proposed regulations pursuant to section 1101(g)(4) of the Bipartisan Budget Act of 2015 regarding an election to apply the new partnership audit regime enacted by that act to certain returns of a partnership. The regulations provide the time, form, and manner for making this election. The regulations affect any partnership that wishes to elect to have the new partnership audit regime apply to its returns filed for certain taxable years beginning before January 1, 2018.

[Federal Register Volume 81, Number 151 (Friday, August 5, 2016)]
[Proposed Rules]
[Pages 51835-51836]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-18632]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-105005-16]
RIN 1545-BN33


Election Into the Partnership Audit Regime Under the Bipartisan 
Budget Act of 2015

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

-----------------------------------------------------------------------

SUMMARY: This document contains proposed regulations pursuant to 
section 1101(g)(4) of the Bipartisan Budget Act of 2015 regarding an 
election to apply the new partnership audit regime enacted by that act 
to certain returns of a partnership. The regulations provide the time, 
form, and manner for making this election. The regulations affect any 
partnership that wishes to elect to have the new partnership audit 
regime apply to its returns filed for certain taxable years beginning 
before January 1, 2018.

DATES: Written or electronic comments and requests for a public hearing 
must be received by October 4, 2016.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-105005-16), Room 
5207, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
105005-16), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20224, or sent electronically via the 
Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-
105005-16). The public hearing will be held in the Auditorium, Internal 
Revenue Service Building, 1111 Constitution Avenue NW., Washington, DC 
20224.

FOR FURTHER INFORMATION CONTACT: Jenni M. Black at (202) 317-6834 (not 
a toll-free number).

Background and Explanation of Provisions

    This notice of proposed rulemaking cross-references to temporary 
regulations published in the Rules and Regulations section of this 
issue of the Federal Register. The temporary regulations amend the 
Procedure and Administration Regulations (26 CFR part 301) to provide 
rules for the time, form, and manner of making the election under 
section 1101(g)(4) of the Bipartisan Budget Act of 2015, Public Law 
114-74 (BBA) for taxable years beginning after November 2, 2015 and 
before January 1, 2018. The BBA was enacted on November 2, 2015, and 
was amended by the Protecting Americans from Tax Hikes Act of 2015, 
Public Law 114-113, div. Q (PATH Act) on December 18, 2015.
    The text of the temporary regulations also serves as the text of 
these proposed regulations. The Background and Explanation of 
Provisions contained in the preamble to the temporary regulations 
explains these proposed regulations.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory impact assessment is 
not required.
    Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it 
is hereby certified that the collection of information contained in 
this regulation will not have a significant economic impact on a 
substantial number of small entities. This certification is based on 
the fact that the collection of information contained in this 
regulation is voluntary and will only occur if a partnership elects 
into the new partnership audit regime enacted by the BBA for taxable 
years beginning after November 2, 2015 and before January 1, 2018. In 
addition, the new partnership audit regime is new, and the IRS has yet 
to provide guidance on the application of the new partnership audit 
regime generally. As a result, the IRS estimates that there will not be 
a substantial number of small entities that elect into the regime for 
an eligible taxable year. However, even if a substantial number of 
small entities elect into the new BBA regime for an eligible taxable 
year, the election under this regulation requires only a short 
statement containing limited and readily available information. 
Therefore, the IRS estimates that the economic impact on electing small 
entities will not be significant. Accordingly, a regulatory flexibility 
analysis is not required.
    Pursuant to section 7805(f) of the Code, these regulations were 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Comments and Request for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any electronic and written comments (a 
signed original and eight (8) copies) that are submitted timely to the 
IRS. The IRS and Treasury request comments on all aspects of the 
proposed rules. All comments will be available for public inspection 
and copying. A public hearing may be scheduled if requested in writing 
by a person that timely submits written comments. If a public hearing 
is scheduled, notice of the date, time, and place of the hearing will 
be published in the Federal Register.

Drafting Information

    The principal author of these proposed regulations is Jenni M. 
Black of the Office of the Associate Chief Counsel (Procedure and 
Administration). However, other personnel from the Treasury Department 
and the IRS participated in their development.

List of Subjects in 26 CFR Part 301

    Income taxes, Penalties, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 is amended by adding 
an entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * *
* * * * *
    Section 301.9100-22 also issued under section 1101(g)(4) of Pub. 
L. 114-74.
* * * * *
0
Par. 2. Section 301.9100-22 is added to read as follows:


Sec.  301.9100-22  Time, form, and manner of making the election under 
section 1101(g)(4) of the Bipartisan Budget Act of 2015 for taxable 
years beginning after November 2, 2015 and before January 1, 2018.

    [The text of this proposed section is the same as the text of Sec.  
301.9100-22T

[[Page 51836]]

published elsewhere in this issue of the Federal Register].

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2016-18632 Filed 8-4-16; 8:45 am]
 BILLING CODE 4830-01-P