Have You Amended Your LLC’s Operating Agreement? Here’s Why You Should.
By: Molly McDonald The auditing requirements for partnerships and limited liability companies taxed as partnerships have changed. If your LLC is taxed as a partnership, not updating your LLC’s Operating Agreement could end up costing you power over the actions of your LLC and money. In 2015, Congress enacted the Bipartisan Budget Agreement of 2015, or the BBA. Bipartisan Budget Act of 2015, Pub. L. No. 114-74, 129 Stat. 584 (2015). Beginning January 1 of this year, the BBA caused the Internal Revenue Service’s audit rules for partnerships and businesses taxed as partnerships to change. Pub. L. No. 114-74, § 1101. In the past, the IRS did not audit partnerships, it only audited members of partnerships. Gregory H. Taggart, LLCs: New Rules and Regulations , 4-5 (Jan. 2018). Under the BBA, not only may the IRS audit a partnership, but it also may collect underpayment and penalties from previous years from the par...