Beware of Accidental Partnerships Under New Audit Regime: IRS

It’s more important than ever that taxpayers know when they have formed a partnership because failing to disclose this status to the IRS will result in greater tax liabilities after 2018, an agency official and tax attorney said.

“Be very careful and keep your eyes open for partnerships that on their face don’t look like partnerships,” said Clifford M. Warren, special counsel to the associate chief counsel (Passthroughs and Special Industries) at the Internal Revenue Service. Licensing agreements, technology cooperative agreements, and purchase or sale agreements can often result in a taxable partnership, he said June 6 at a Practising ...