Winston & Strawn LLP: “On June 13, 2017, the U.S. Treasury Department and Internal Revenue Service (“IRS”) re-released proposed regulations (the “Proposed Regulations”) governing the new centralized partnership audit regime that is scheduled to become effective for partnership taxable years beginning on or after January 1, 2018. . . . The Proposed Regulations provide, among other things, rules and procedures for (i) electing out of the centralized partnership audit regime, (ii) designating and replacing the partnership representative, (iii) determining amounts owed by the partnership or partners attributable to adjustments that arise out of a partnership audit, and (iv) “pushing out” partnership adjustments to the persons that were partners in the partnership in the taxable year under audit (the “review year”). . . . Partnerships . . . should be considering appropriate amendments to their partnership agreements to address a number of the issues discussed above, including
(i) the designation and removal of the partnership representative,
(ii) partners’ notice and participation rights in connection with audits,
(iii) appropriate indemnification protection for the partnership representative, and
(iv) how to ensure that imputed underpayments are economically borne by the appropriate partners (or former partners).