Mary McNulty Quoted in Law360 on Partnership Audit Regs

“Long-Awaited Partnership Audit Regs No Longer So Welcome”

Partnership audit rules issued by the IRS on the Obama administration’s penultimate day are likely to face lawsuits, according to experts, some of whom say the agency’s proposed process for designating partnership representatives and calculating “imputed underpayments” is unsupported by federal law.

“The statute’s already enacted, but there are gaping holes in the statute that the regulations help,” said Mary McNulty, a partner at Thompson & Knight LLP. “I would expect the same regulations to be reproposed in 60 days maybe with some clean up … because they were in a rush to get those regulations out before the new administration took over.”