Shumaker Manufacturing

A Legal & Industry Review


“New Partnership Audit Regime: Opt-Out, Push-Out, or Pay-Up?”

On November 2, 2015, Congress passed the Bipartisan Budget Act of 2015 (BBA),¹ which enacted a new centralized audit regime (regime) that applies to all entities taxed as a partnership for taxable years starting after December 31, 2017. The most important feature of the regime is that it refocuses all audit activities on the partnership itself instead of the partners, including requiring assessments of tax deficiencies and collections at the entity level. The BBA identified several issues for which the Treasury Department and Internal Revenue Service (IRS) were to promulgate regulations to carry out the statutory objectives. This was a significant undertaking for Treasury and IRS, as the BBA flipped partnership taxation from a “flow-thru” construct to one in which the partnership would be primarily liable for any additional income tax due after audit. The congressional goal was to reduce the administrative burdens placed on IRS for audits of partnerships, and move that burden to the partnerships themselves.² Continue reading


“IRS Compliance Focus: The Excise Tax on Heavy Trucks”

There is no steering around the Federal Excise Tax (“FET”) on heavy trucks and trailers, and some companies are finding that out in the most unpleasant way possible – through an IRS audit. Similar to states’ sales taxes, the federal government imposes a 12% tax on the sale of trucks with a gross vehicle weight (“GVW”) above 33,000 pounds, trailers above 26,000 pounds, and tractors above 19,500 pounds. Continue reading