George Hani was quoted regarding the new partnership audit regime, challenges facing some proposals, and how tax reform may impact partnerships in the future. Electing out is one area of the Bipartisan Budget Act of 2015 (BBA) where partnerships are waiting for the final and additional proposed rules to be in place before making decisions. "Most people want to be able to decide at some other point in time [whether to opt out], so even if they are set up correctly for 2018, they also have to set up protections to keep transfer restrictions in place," Hani said. The BBA's broad statutory role of partnership representatives has been identified as one risk area. Litigation resulting from the sweeping authority given to the partnership representative seems likely, Hani said, adding that for example, if a partnership agreement says the representative cannot extend the statute of limitations and the IRS [Internal Revenue Service] is on notice of this restriction, but during an audit the representative thinks it advisable to extend the statute to resolve an audit administratively and agrees to an extension, the conflict might end up in court. There is also concern regarding what happens in the 30-day period after a representative resigns; the proposed regulations could lead to mischief based on the circumstances under which the representative stepped down. "I think [the government] is sensitive to the point about not leaving that in place," Hani said. Other changes to the new regime may come not in regulations, but in other guidance, Hani said, adding that questions remain about how disputes regarding modifications of imputed underpayments will be resolved and what happens if an election out is deemed invalid. "How is the appeals process going to work and how will that be coordinated?" The modification process may have adjustments made to it in the future, but it is generally favorable to taxpayers because it gives them an opportunity to come up with a number that fits and gives the government a method that can assure it that the underpayment is the right amount, Hani said. Tax reform might provide a vehicle for moving the technical corrections bill through Congress, but hopefully the taxpayers wouldn't have to wait that long, Hani said, adding that another issue Congress might want to address is whether a partnership may make a push-out election through tiers. "I view that as a substantive change to the rule," Hani said.