The U.S. Internal Revenue Service (IRS) has issued regulations which require partnerships to appoint a Partnership Representative for taxable years beginning after December 31, 2017. Partnerships must appoint the Partnership Representative by March 15, 2019, or if filing an extension for the 2018 tax year, by September 16TH , or the IRS will assign a Partnership Representative on behalf of the partnership.
Any U.S. based partnerships that does not designate itself as Partnership Representative, and foreign entities that do not have a substantial U.S. presence will need to name a U.S. person or entity as its Partnership Representative. Due to the substantial power of the Partnership Representative to obligate a partnership during an IRS audit, it is imperative for the Partnership Representative to be a knowledgeable and trusted delegate for the partnership.
Constellation provides outsourced Partnership Representative services to represent limited partnerships, general partnerships, limited liability companies and certain other non-U.S. companies during IRS audits. Constellation qualifies as a Partnership Representative under the “substantial presence” in the United States rule, which is defined as being willing and able to meet in person with the IRS at a reasonable time and place, holding a U.S. taxpayer ID, having a U.S. street address, and having a telephone number with a U.S. area code. Constellation acts as the Partnership Representative by naming a qualified and knowledgeable individual as the Designated Individual.
Constellation will work with the partnership to consult with U.S. legal counsel to determine the requirements surrounding their appointment of a Partnership Representative, and whether the partnership has a substantial presence in the U.S., as determined under appropriate regulations and applicable law. Based on these findings the partnership should decide whether to appoint an internal or external source as its Partnership Representative.
Should a partnership desire an outsourced Partnership Representative solution, Constellation’s Partnership Representative services team will establish a qualified Designated Individual as the Partnership Representative.