Client AlertsHolding the Bag: Update Your Operating Agreement or Face the Tax Consequences
New Law – Direct Assessment of LLC Tax Liability The Tax Equity and Fiscal Responsibility Act (“TEFRA”) has governed the procedures for auditing partnerships since 1982. Under TEFRA, if the IRS audited an LLC taxed as a partnership, it could not hold the LLC responsible for federal income tax deficiencies. Rather, liability remained with the...

