Sec. 201. Scope of adjustments subject to partnership audit rules
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Section 6241(2) is amended to read as follows: The term partnership adjustment means any adjustment to a partnership-related item. The term partnership-related item means— any item or amount with respect to the partnership (without regard to whether or not such item or amount appears on the partnership’s return and including any item or amount relating to any transaction with, basis in, or liability of, the partnership) which is relevant (determined without regard to this subchapter) in determining the tax liability of any person under chapter 1, and any partner’s distributive share of any item or amount described in clause (i). .
Section 6241 is amended by adding at the end the following new paragraph: This subchapter shall not apply with respect to any tax imposed (or any amount required to be deducted or withheld) under chapter 2, 2A, 3, or 4, except that any partnership adjustment determined under this subchapter for purposes of chapter 1 shall be taken into account for purposes of determining any such tax to the extent that such adjustment is relevant to such determination. . Section 6211(c) is amended to read as follows:
In determining the amount of any deficiency for purposes of this subchapter, adjustments to partnership-related items shall be made only as provided in subchapter C. . Section 6221(a) is amended to read as follows: Any adjustment to a partnership-related item shall be determined, and any tax attributable thereto shall be assessed and collected, and the applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item shall be determined, at the partnership level, except to the extent otherwise provided in this subchapter. .
Section 6222(a) is amended to read as follows: A partner shall, on the partner’s return, treat any partnership-related item in a manner which is consistent with the treatment of such item on the partnership return. . Section 6226(a)(2) is amended by striking any adjustment to income, gain, loss, deduction, or credit and inserting any adjustment to a partnership-related item . Section 6227(a) is amended by striking items of income, gain, loss, deduction, or credit of the partnership and inserting partnership-related items .
Section 6231(a)(1) is amended by striking any item of income, gain, loss, deduction, or credit of a partnership for a partnership taxable year and inserting any partnership-related item for any partnership taxable year . Section 6234(c) is amended by striking all items of income, gain, loss, deduction, or credit of the partnership and inserting all partnership-related items .