Have You Appointed Your U.S. Partnership Representative? What you need to know

      The extended IRS Form 1065 filing deadline for the 2019 tax year will be 15 September 2020. Funds that have launched in 2019

      The extended IRS Form 1065 filing deadline for the 2019 tax year will be 15 September 2020. Funds that have launched in 2019 or are otherwise considering the appointment of a U.S. Partnership Representative should ensure that they meet this deadline.

      The new partnership audit rules that came into effect for tax years beginning 1 January 2018, require partnerships (or entities treated as partnerships for tax purposes) to appoint a Partnership Representative for each tax year.

      The Partnership Representative must be named on the partnership tax return Form 1065. The Partnership Representative must also have a substantial presence in the United States. A substantial presence requires the Partnership Representative to have:-

      • a U.S. taxpayer identification number
      • a U.S. telephone number and a U.S. street address
      • be available to meet in person with the IRS at a reasonable time and place and
      • if the Partnership Representative is an entity, the partnership must appoint an individual who meets the substantial presence requirements to act as the “designated individual” of the entity serving as Partnership Representative

      If a partnership does not appoint its own partnership representative (“PR”), the IRS can select any person to serve as PR with the power to bind the partnership and all its partners.

      Although there is no strict technical requirement in the Regulations that a PR be a U.S. citizen, as a practical matter this is reality because it can be challenging for a non-U.S. citizen to obtain a TIN number.

      ELECTING-OUT

      There are strict eligibility requirements to opt out of the new regime, which includes the number and type of partners in a partnership and notification requirements to each partner. Virtually all hedge and private equity partnerships will not be eligible to elect out of the new audit rules due to not meeting the eligible partner requirement. Should the fund be eligible to elect out, this election must be made in a timely filed tax return. Partnerships should carefully consider the eligibility requirements with their tax advisor to determine the viability of opting out of the new regime.

      THE DMS PARTNERSHIP REPRESENTATIVE SOLUTION

      DMS provides a comprehensive, competent and qualified U.S. Partnership Representative solution that meets all IRS requirements and protects the interests of the partnership. Accordingly, the PR and the Designated Individual acting on behalf of the DMS Entity Partnership Representative shall not, without the prior written approval of the General Partner:

      • engage advisors;
      • schedule or attend meetings or conference calls with the IRS or advisors, unless additionally attended by the General Partner or such advisors as the General Partner shall appoint;
      • file requests, protests, court filings, settlements, or other documents with the IRS or courts;
      • propose, consent to or otherwise enter into any material agreements with the IRS (including waivers or extensions of statutes of limitations and settlement agreements); and
      • make any election on behalf of the Partners or Partnership.

      KEY DIFFERENTIATORS OF DMS PARTNERSHIP REPRESENTATIVE SERVICES

      SCALE AND LENGTH OF SERVICE
      Visibility and access to best global fund governance + risk + compliance practices.
      18+ years delivering market leading solutions to the investment management community.

      POOL OF EXPERIENCED PARTNERSHIP REPRESENTATIVES
      A pool of highly skilled and experienced compliance specialists with extensive fund governance and regulatory experience.

      GLOBAL FIRM WITH LOCAL KNOWLEDGE
      8 global locations servicing clients across 6 time zones with a robust U.S. presence.

      For additional information, please contact your usual DMS professional or any one of our team below to assist you in evaluating your service options.

      Previous post Next post
      Share

      More like this

      CONVERGENCE: New Rules Impacting Regulated Funds In The Cayman Islands

      A key trend in recent years for financial services law and regulation is convergence. Keen readers of the Private Funds…
      Read more

      海外基金在瑞士募资

      继我们最近收购Oligo Swiss Fund Services ,欢迎参加此在线研讨会,了解有关在瑞士发行基金产品的更多信息。在线研讨会的重点将是海外基金如何在瑞士募资及配销,以及在亚洲现有可用的基金互认计划。
      Read more

      The DMS Group, MDO And MontLake Create Leading Global Governance Firm

      The DMS Group (“DMS”), together with MDO and MontLake are pleased to announce an agreement1 to create a leading, global…
      Read more

      开曼群岛开放式基金: 2020 年 8 月 7 日登记截止日期

      迄今为止,某些类别的开放式开曼群岛基金一直获豁免向开曼群岛金融管理局(简称 “CIMA”)登记。
      Read more

      MUTUAL FUNDS AMENDMENT LAW 2020 - OVERVIEW DOC

      THE PRIVATE FUNDS LAW 2020 OVERVIEW DOCUMENT: VIEW HERE >> [post-video-popup-form][/post-video-popup-form]
      Read more

      THE PRIVATE FUNDS LAW 2020 - OVERVIEW DOC

      THE PRIVATE FUNDS LAW 2020 OVERVIEW DOCUMENT: VIEW HERE >> [post-video-popup-form][/post-video-popup-form]
      Read more