PARTNERSHIP AUDIT RULES.

SEC. 411. PARTNERSHIP AUDIT RULES. (a) Correction and Clarification to Modifications to Imputed Underpayments.— (1) [26 U.S.C. 6225] Section 6225(c)(4)(A)(i) is amended by striking “in the case of ordinary income,”. (2) Section 6225(c) is amended by redesignating paragraphs (5) through (7) as paragraphs (6) through (8), respectively, and by inserting after paragraph (4) the following new paragraph: “(5) Certain passive losses of publicly traded partnerships.— “(A) In general.—In the case of a publicly traded partnership (as defined in section 469(k)(2)), such procedures shall provide— “(i) for determining the imputed underpayment without regard to the portion thereof that the partnership demonstrates is attributable to a net decrease in a specified passive activity loss which is allocable to a specified partner, and “(ii) for the partnership to take such net decrease into account as an adjustment in the adjustment year with respect to the specified partners to which such net decrease relates. “(B) Specified passive activity loss.—For purposes of this paragraph, the term ‘specified passive activity loss’ means, with respect to any specified partner of such publicly traded partnership, the lesser of— “(i) the passive activity loss of such partner which is separately determined with respect to such partnership under section 469(k) with respect to such partner’s taxable year in which or with which the reviewed year of such partnership ends, or “(ii) such passive activity loss so determined with respect to such partner’s taxable year in which or with which the adjustment year of such partnership ends. “(C) Specified partner.—For purposes of this paragraph, the term ‘specified partner’ means any person if such person— “(i) is a partner of the publicly traded partnership referred to in subparagraph (A), “(ii) is described in section 469(a)(2), and “(iii) has a specified passive activity loss with respect to such publicly traded partnership, with respect to each taxable year of such person which is during the period beginning with the taxable year of such person in which or with which the reviewed year of such publicly traded partnership ends and ending with the taxable year of such person in which or with which the adjustment year of such publicly traded partnership ends.” . (b) Correction and Clarification to Judicial Review of Partnership Adjustment .— (1) [26 U.S.C. 6226] Section 6226 is amended by adding at the end the following new subsection: “(d) Judicial Review.—For the time period within which a partnership may file a petition for a readjustment, see section 6234(a).” . (2) [26 U.S.C. 6234] Subsections (a)(3), (b)(1), and (d) of section 6234 are each amended by striking “the Claims Court” and inserting “the Court of Federal Claims”. (3) The heading for section 6234(b) is amended by striking “Claims Court” and inserting “Court of Federal Claims”. (c) Correction and Clarification to Period of Limitations on Making Adjustments.— (1) [26 U.S.C. 6235] Section 6235(a)(2) is amended by striking “paragraph (4)” and inserting “paragraph (7)”. (2) Section 6235(a)(3) is amended by striking “270 days” and inserting “330 days (plus the number of days of any extension consented to by the Secretary under section 6225(c)(7)”. (d) [26 U.S.C. 6031] Technical amendment.—Section 6031(b) is amended by striking the last sentence and inserting the following: “Except as provided in the procedures under section 6225(c), with respect to statements under section 6226, or as otherwise provided by the Secretary, information required to be furnished by the partnership under this subsection may not be amended after the due date of the return under subsection (a) to which such information relates.”. (e) [26 U.S.C. 6031 note] Effective Date.—The amendments made by this section shall take effect as if included in section 1101 of the Bipartisan Budget Act of 2015.