Does my US business need a partnership representative?
Regulatory update 1 minute read

Does my US business need a partnership representative?

26 July 2019

Businesses in the United States classified for federal tax purposes as US partnerships must elect an official “partnership representative” to serve as a liaison with the Internal Revenue Service (IRS).

The regulation became effective after 2017 and was intended to resolve the difficulty the IRS has been experiencing obtaining answers or resolving problems when the partnership’s designated “tax matters partner” was unreachable.

Who can be a partnership representative?  

A partnership representative can either be an individual or a corporation with a substantial presence in the US and will be named in the partnership’s tax return. If the partnership representative is an entity, it needs to designate an individual as the “Authorized Person” who will be the IRS point of contact. The representative is elected for this position for one year and remains the IRS contact for that year’s tax filing, regardless of when the IRS examines the return.  A partnership representative does not have to be involved in the business of the partnership, and so the partnership may use a third-party to provide this service. However, the partnership representative is not only a name on a form and a point of contact. This person has the right to make decisions on behalf of the partnership when dealing with the IRS.

In order to be a partnership representative, the entity or individual must:  

  1. have a US street address;
  2. have a US phone number; 
  3. have a US tax ID number; and
  4. be available to meet with the IRS in person. 

We can help

This regulation requires compliance by all US partnerships. The increased responsibility that comes with the role of partnership representative means that your business must choose a trustworthy party to handle interactions with the IRS. TMF USA can provide a partnership representative for your business. TMF Group is one of the largest independent service providers for accounting and tax worldwide and our experts are available to help with all your needs. Talk to us

Written by

Albert Fioravanti

Managing Director, New York
Albert

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