IRS Independent Office of Appeals  Other Options – Pass-Through Entity Appeals (BBA)

IRS Independent Office of Appeals  
Other Options – Pass-Through Entity Appeals (BBA)

The Bipartisan Budget Act of 2015 (BBA), as amended, repealed the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) partnership procedures and electing large partnership
provisions and replaced them with an entirely new centralized partnership audit regime. BBA is
generally effective for tax years beginning 1/1/2018, with allowances for early elect-in for tax
periods beginning after 11/2/2015.

If the entity and tax year(s) at issue are covered by BBA, the entity has appeal rights. At the end
of the Appeals process, Appeals will issue a Notice of Proposed Partnership Adjustment
(NOPPA) for all proposed adjustments, whether agreed or unagreed. In response to the NOPPA,
the partnership may request modification and an opportunity for a modification Appeals hearing.
However, in a modification Appeals hearing, Appeals will not reconsider an issue that was
previously disputed and considered by Appeals.

If a Notice of Final Partnership Adjustment (FPA) is issued, the partnership may elect to “push-
out” an imputed underpayment to its partners to take into account, file a petition for judicial
review of the adjustments, or both. See www.irs.gov/businesses/partnerships/bbapartnership-
audit-process, for more information.

Next week: Recovering Administrative and Litigation Costs Part I)
(IRS PUBLICATION 5) (TTT 082024)