Partnership Audit Efforts Continue Amid IRS Turmoil

Tax attorney Lee Meyercord was quoted in a Tax Notes article covering the Practising Law Institute's (PLI) "Understanding the BBA Partnership Audit Rules 2026" conference, in which she spoke on two panels. The PLI program featured analysis of ongoing IRS partnership audit and compliance efforts as the agency faces significant staffing reductions and operational disruptions. The article highlighted comments from an IRS official that large partnership audits, compliance campaigns and soft letter initiatives remain active, while also examining debate over a U.S. Department of the Treasury regulation that treats certain non-income adjustments as positive adjustments giving rise to imputed underpayments under the Bipartisan Budget Act's (BBA) centralized partnership audit regime. Ms. Meyercord was cited predicting that the U.S. Supreme Court's Loper Bright decision will spur taxpayer challenges to that regulation. She also commented on the practical treatment of non-income adjustments, emphasizing that "there are plenty of non-income items that both the revenue agent and the taxpayer agree have no tax impacts" and identifying examples of these situations in which both sides consider the adjustments purely informational rather than tax-generating.

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