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New IRS Regulations Impact LLCs and Partnerships – Part 5: Role of the Representative

October 18, 2017 CGS3 Entity Formation

On January 1, 2018, new IRS regulations are poised to take effect that will have consequences for both limited liability companies (LLCs) and partnerships.  A well-structured entity reaps many benefits—liability protection, tax savings and asset protection among them—so attention to the evolution of the new centralized partnership audit regime is critical.

Under the IRS’s proposed regulations (REG-136118-15), the partnership or LLC can shift the burden of paying any interest or tax from adjustments to the individuals of the entity through a push-out election. This, in turn, requires the entity to appointing a representative, who’s decisions are generally binding on the entity. In the latest installment of a series on the regulations, CGS3 partner and tax practice team chair Phil Jelsma discusses who is eligible to be the partnership representative, how to designate the representative and why selecting the appropriate person to this role is so critical.

The remainder of the series will continue to examine aspects and consequences of the regulations, including the consistency requirement.

Read the full article from the Los Angeles Daily Journal here or from the San Diego Daily Transcript here.

Part 1 of the series (Overview) can be read here: Los Angeles Daily Journal San Diego Daily Transcript.
Part 2 of the series (Opting Out) can be read here: San Diego Daily Transcript.
Part 3 of the series (Rules of Adjustment) can be read here: Los Angeles Daily Journal San Diego Daily Transcript.
Part 4 of the series (Push-Out Elections) can be read here:  Los Angeles Daily Journal / San Diego Daily Transcript.