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Eric, you bring up a good point about the consequence of opting out and then individual partners can be opened up for audit. In my situation, my clients are husband and wife filing as partners. How does opting out affect eligibility for requesting penalty abatement due to reasonable cause? The previous rules required opting out to be eligible for reasonable cause abatement. Is that true for the new rules, as well? More details are listed in the originally posted question.
I see I caused some confusion by misquoting a section, so let me correct it:
The Tax Book Deluxe Edition states on page 20-7 that the new audit regime applies to all partnerships UNLESS, the partnership IS an eligible partnership and it elects out by making a valid election using Schedule B-2 (1065).