The Bipartisan Budget Act of 2015 (Public Law No. 114-74) replaced the auditing and tax collection procedures for partnerships under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and the electing large partnership rules with the centralized partnership audit regime, with the centralized partnership audit regime, also referred to as BBA or PBBA, generally effective for tax years beginning January 2018.
Under the BBA, the IRS generally assesses and collects any understatement of tax (called an imputed underpayment or IU) at the partnership level. Partnerships may request to modify the IU and may elect to push out the adjustments underlying the IU instead of paying.
The IRS implemented a Bi-Partisan Budget Act (BBA) Centralized Partnership Audit Regime website as a one-stop location for BBA-related information, regulations and guidance. Information on the website includes regulations, electronic submission of forms, the Partnership Representative (PR), electing out of the centralized audit regime, Administrative Adjustment Requests (AARs), and what to expect during a BBA administrative proceeding.