Some 12 months on from legislative changes requiring entities filing as a US partnership for tax purposes to appoint a US based partnership representative, industry participants should be reminded that this is now an annual requirement.  For the 2019 tax return, the deadline for partnerships that filed an extension to make an election to the Internal Revenue Service ("IRS") is 15 September 2020.

The requirement for a US based partnership representative to be appointed, in addition to naming a designated individual to liaise with the IRS in the event of an audit and handle all relevant matters, was introduced in the Bipartisan Budget Act of 2015, replacing the previous requirement for partnerships to designate a tax matters partner.

Throughout the prior and current tax year, we have seen significant interest from asset managers specialising in various investment strategies, from traditional investment funds and structured finance deals, for our third party partnership representative solution.  There are a number of situations where the presence of an experienced professional as partnership representative can be advantageous.  

In cases where the partnership representative is an entity, the partnership must appoint a designated individual to act on its behalf.  The designated individual is required to have a substantial presence in the US, with a US taxpayer ID number, a US street address and phone number.  They must also be reachable and make themselves available to meet with the IRS, when required, at a reasonable time and place. 

In situations where asset managers are not located in the US, logistical considerations mean that it is more convenient for a dedicated third party provider such as the Maples Group to act as partnership representative. 

Additionally, with the requirement to be reachable and available to meet on reasonable notice, given the strain on schedules for busy CFOs and tax directors, it is more efficient for an experienced, outsourced professional to be in place to deal with such audit related matters at short notice.

The Maples Group has a longstanding track record of acting as tax matters partner in Delaware and the Cayman Islands to a diverse asset manager client base.  With a substantial presence and significant resources in the US, we have the ability to provide partnership representative services, including highly experienced professionals to act as designated persons and liaise accordingly with the proper US tax authorities. 

CONTACTS

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Edward L. Truitt Jr.

Regional Head of Fiduciary - Delaware

+1 302 338 9129

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James Lawler

Senior Vice President

+1 302 340 9985

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