Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
By Che Odom
A leading organization that develops uniform tax laws for states will soon provide formal feedback to a coalition of industry groups finalizing a model statute regarding partnership audits.
“We are wrapping up our comments and will begin to circulate them in a couple of days,” Helen Hecht, general counsel of the Multistate Tax Commission, said during a conference call Oct. 12. The feedback will be distributed to a coalition of industry-taxpayer groups, she said.
The coalition, known as “the interested parties,” includes the Council On State Taxation, the Tax Executives Institute Inc., the Institute for Professionals in Taxation, the American Institute of CPAs, and a task force of the American Bar Association tax section’s State and Local Tax Committee. The interested parties have proposed a model uniform statute and regulation and presented it to the MTC for its review.
“Each of the interested parties will soon ask for official approval from our individual organizations, so we are looking for MTC feedback on it,” Bruce P. Ely, senior partner in the Birmingham, Ala., office of Bradley Arant Boult Cummings LLP, said during the conference call.
The proposed model is designed to promote uniformity among states conforming with the new federal partnership audit regime, thereby aiding multistate entities with compliance. The interested parties hope that the MTC, which itself develops model acts, will give the model statute its blessing in time for the coalition to provide a final version to state lawmakers around the country by November, when some state legislative committees begin meeting. The new federal partnership audit regime, part of the Bipartisan Budget Act of 2015, takes effect Jan. 1.
Right now, the MTC and the interested parties continue to iron out details and address concerns that states have with the draft model.
Ely said he hopes the interested parties and the MTC can approach state lawmakers “arm and arm” to avoid competing proposals.
States, along with the MTC, have been working for the last several months on addressing the state-side impact of the new default regime for partnership audits.
The Internal Revenue Service’s proposed regulations (REG-136118-15, RIN:1545-BN77), which will carry out the regime, generally provide for assessment and adjustments at the entity level, rather than among individual partners, and they have generated a host of questions and concerns over the flow-through impact at the state level.
Ely, co-chair of the ABA State and Local Tax Committee task force, helped organize the coalition of interested parties in developing their model act to address state conformity with the federal regime.
He told Bloomberg BNA that they are attempting a “fair and balanced attempt at streamlining the reporting process for taxpayers while not depriving the states of the tax they are entitled to collect as a result of what we expect to be substantially increased IRS audits.”
To contact the reporter on this story: Che Odom at COdom@bna.com
To contact the editor responsible for this story: Jennifer McLoughlin at firstname.lastname@example.org
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)