How CPAs Helped Shape Senate Bill 1035



Now on its way to the full Senate for consideration, Senate Bill 1035 aims to allow partnerships to pay tax at the partnership level or push out audit adjustments to their partners upon receipt of a federal audit adjustment which declares they owe additional dollars. The bill is a result of the Bipartisan Budget Act (BBA) which changed federal tax assessments of partnerships from the partner level to the partnership level.  

As Michigan still subscribes to the pass-through method, accounting for profits and losses of partnerships on the individual or corporate income tax returns of the partners, SB 1035 will give partnerships in Michigan the opportunity to square up any differences with the state that may occur as a result of a federal audit performed at the partnership level, according to Senator Jim Runestad, who sponsored the bill. 

To ensure the bill contained clear, concise language, Sen. Runestad sought the insight and expertise of MICPA members who specialize in partnership audits. By drawing upon the experience of our members, he was able to gather CPA feedback on how to present the bill in a way that affected taxpayers could easily understand. Kurt Piwko, a partner in Plante Moran’s National Tax Office who provided feedback on the bill, commented, “The input of the MICPA was invaluable in making sure that the process envisioned by SB 1035 would work as smoothly as possible.” 

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Source: MICPA

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