SAN DIEGO—Last month, President Obama signedHR 1314, the Bipartisan Budget Act of2015, a comprehensive bill which—among otherthings—significantly alters the way partnerships andlimited liability companies are audited and taxedby the IRS. The new "streamlined" rules allow theIRS to audit and assess taxes and penaltiesagainst large partnerships more easily and retool a 33-year-old lawthat sets the rules for audits, Phil Jelsma, a partner and chair of the taxpractice team at the San Diego-based commercial real estate lawfirm Crosbie Gliner Schiffman Southard & SwansonLLP, tells GlobeSt.com.

According to the Congressional Budget Office,the new partnership auditing procedures are expected to increaseTreasury revenues by up to $11.2 billion over thenext decade. Jelsma, co-author of the book, The LimitedLiability Company, says commercial real estate professionalsshould be aware of the changes in the legislation—especially sinceexisting partnership and operating agreements will need to berevised to incorporate the new rules. He tells GlobeSt.comexclusively what the industry should know about these new rules andhow they differ from the current law.

GlobeSt.com: Please describe the currentlaw.