I got a call from a general partner whose partnership representative had just resigned mid-audit – without notice, without filing anything, and without identifying a successor. What followed was several weeks of scrambling to get Form 8979 processed, a period during which the IRS continued correspondence addressed to an individual who was no longer authorized to act. The BBA rules on partnership representative changes are not forgiving when you ignore them.
Key Takeaways
- What it does: Form 8979 is used to revoke a partnership representative (PR) designation, notify the IRS of a PR resignation, or designate a new PR after the IRS has already begun a BBA centralized partnership audit proceeding.
- Who files it: The partnership itself (for revocations and new designations) or the outgoing partnership representative (for resignations), filed directly with the IRS during an active audit proceeding.
- Key restriction: Form 8979 can only be filed after an IRS BBA audit proceeding begins – it is not used for annual partnership representative designations on Form 1065, which happen through a different mechanism.
- IRS must approve: Revocations of a PR designation require IRS consent – the partnership cannot simply revoke without IRS approval once an audit proceeding is underway.
- Successorship gap risk: If a PR resigns or is revoked before a successor is designated, the IRS may proceed with the audit without a valid PR in place, and the partnership may lose its ability to participate effectively.
- SOP tip: Any partnership subject to BBA rules should have a PR succession plan documented in its partnership agreement – Form 8979 is the remedy when that plan was never made.
What Form 8979 Is and When to Use It
Under the BBA centralized partnership audit regime (effective for tax years beginning after December 31, 2017), every partnership subject to the BBA rules must designate a partnership representative. The PR is the sole authority for the partnership in IRS audit proceedings – partners have no independent right to participate. The PR can bind the partnership on all audit matters, including settlements, election of push-out, and acceptance of Final Partnership Adjustments.
Form 8979 exists because circumstances change during audits. A PR may resign, become incapacitated, or lose the partnership’s confidence. The partnership may need to revoke the designation. The IRS needs a way to formally process these changes and ensure there is always a valid PR in place to receive IRS notices and bind the partnership.
When Form 8979 Is Needed
Three triggering events require Form 8979:
- Revocation by the partnership: The partnership wants to remove the current PR and designate a new one. This requires IRS consent and a simultaneous or subsequent designation of a successor.
- Resignation by the PR: The current PR wants to resign from the role. The form notifies the IRS and should be accompanied by a designation of the successor PR.
- Designation of a new PR: After a revocation or resignation (or when no valid PR exists due to a prior gap), the partnership designates a new PR using Form 8979.
What Form 8979 Is NOT Used For
Form 8979 is not used for the initial designation of a partnership representative on the partnership’s annual return (Form 1065 – the PR designation there happens in the relevant section of the return itself). It is also not used to make the initial BBA election. Form 8979 is strictly a tool for managing PR changes during an active IRS audit proceeding. Using it outside that context will result in rejection.
The Designated Individual Requirement
If the designated PR is an entity (not a natural person), the partnership must also designate a specific “designated individual” who will act as the PR’s human contact point with the IRS. Both the entity PR and the designated individual must be identified on Form 8979. This requirement catches some practitioners off-guard when the partnership’s managing entity – an LLC or GP entity – is named as PR without identifying the human representative.
How to Complete Form 8979, Section by Section
Form 8979 is relatively concise – a two-page form – but each section requires precise information to be processed correctly by the IRS during an active audit.
| Section / Field | What to Complete | Practitioner Notes |
|---|---|---|
| Part I – Partnership Information | Partnership name, EIN, tax year(s) under examination, IRS office and agent handling the audit | Include the exact tax year(s) under audit. If multiple years are under examination, list all. Use the IRS agent’s name from the audit notification letter. |
| Part II – Current PR Information | Name, address, TIN, and contact information of the current (outgoing) PR | This section is required for revocations and resignations. For new designations where no prior PR existed, indicate that in the remarks. |
| Part III – Action Requested | Check the applicable box: Revocation by partnership, Resignation by PR, or Designation of new PR | All three boxes can be checked if the partnership is simultaneously revoking the old PR and designating a new one. Do not leave the action ambiguous. |
| Part IV – New PR Information (if designating) | Name, address, TIN, and contact information of the new PR; if entity PR, also identify the designated individual | The new PR’s TIN is required – do not submit without it. For entity PRs, include both the entity EIN and the designated individual’s SSN or ITIN. |
| Signatures | Signed by the partnership representative, a partner, or other authorized person per the applicable action | For revocations: the partnership must sign. For resignations: the outgoing PR must sign. For new designations: the new PR must consent and sign. Missing signatures cause IRS rejection. |
Where to File Form 8979
Form 8979 is filed directly with the IRS – specifically with the IRS office or agent handling the partnership audit, not with a general IRS filing center. The form should be sent to the address or fax number provided in the audit notification correspondence. Always retain a copy and confirm receipt with the IRS agent in writing.
IRS Consent for Revocations
A critical procedural rule: the IRS does not automatically grant revocations. If the partnership wants to revoke its PR designation, it must request IRS consent, and the IRS has discretion to deny or delay that consent in some circumstances – especially if granting the revocation would impair the audit. My practice is to always accompany a revocation request with the designation of a successor PR to eliminate any concern that the audit will be left without an authorized representative.
Deadlines, Filing Requirements, and Consequences
Form 8979 has no fixed annual filing deadline – it is an event-driven form filed when a PR change occurs during an active audit proceeding. But the practical deadlines are driven by the audit timeline.
| Event | Timing | Consequence of Delay |
|---|---|---|
| PR resignation during audit | As soon as the PR decides to resign; should not wait until IRS correspondence arrives | IRS continues to send binding notices to the outgoing PR; any actions taken by the outgoing PR after resignation intent is formed remain legally binding on the partnership |
| Revocation request by partnership | File promptly after the partnership decides to replace the PR; IRS must process before revocation is effective | IRS communications continue to the current PR and are binding until the revocation is formally accepted |
| Designation of successor PR | Simultaneous with or immediately after revocation or resignation | A gap without a valid PR leaves the IRS without an authorized contact and may allow the IRS to proceed without the partnership’s participation |
| Final Partnership Adjustment issuance | IRS issues to the PR on file at the time of issuance | An FPA issued to a former or unauthorized PR may still bind the partnership; strict compliance with Form 8979 timing prevents this dispute |
What Happens Without a Valid PR
If a partnership fails to maintain a valid partnership representative during an audit, the IRS has authority to select a PR from among the partnership’s partners. The IRS-appointed PR has the same authority as a voluntarily designated one – including the ability to waive rights and bind the partnership. This is an outcome every partnership should be motivated to avoid.
The Partnership Representative Role: Authority, Liability, and Strategy
The partnership representative is one of the most consequential roles in the BBA audit framework. Understanding its scope is essential before designating someone to fill it.
Sole Authority to Bind the Partnership
The PR has the exclusive authority to act on the partnership’s behalf in an IRS audit proceeding. No partner – regardless of ownership percentage or governance rights under the partnership agreement – has an independent right to participate in the audit, review correspondence, or challenge actions taken by the PR. The PR’s decisions are binding on the partnership and all its current and former partners for the reviewed year.
Eligibility Requirements for Partnership Representatives
A PR must have “substantial presence” in the United States – the IRS defines this as being available to meet with the IRS in the U.S., having a U.S. taxpayer identification number, and having a U.S. address and phone number. A PR can be any person, including a non-partner – the firm’s CPA is a common and appropriate choice. Entity PRs must designate a designated individual who meets the same presence requirements. This eligibility check should be conducted before the initial Form 1065 designation, not just when Form 8979 is needed.
Strategic Considerations When Changing the PR
Changing the PR mid-audit is not just a procedural formality. The new PR inherits all prior audit history and is bound by any actions the prior PR already took – including representations made to the IRS agent, documents provided, and any informal settlements in progress. Before accepting the PR designation on Form 8979, the new PR should review all prior audit correspondence, confirm the status of any open issues, and assess what has already been conceded. From my side of the desk, I always run a full audit file review before signing onto a PR role mid-proceeding.
Form 8979 in the Context of BBA Partnership Audit Administration
Form 8979 connects to a larger ecosystem of BBA-related forms and procedures. Understanding how it fits helps practitioners advise partnership clients comprehensively.
Related BBA Forms
Form 8979 relates closely to Form 8983 (Certification of a Partnership Representative) and Form 8978 Schedule A (Partner’s Additional Reporting Year Tax). Together, these forms manage the administrative infrastructure of BBA audits – who speaks for the partnership, and how the audit’s tax consequences are allocated to partners. Form 8989 (Request to Use the Alternative to Penalties) also connects to the broader BBA compliance system.
Impact on Partnership Governance Documents
The BBA regime exposed a significant gap in many partnership agreements: they either failed to address the PR role at all or addressed it in ways incompatible with the BBA’s requirements. After the BBA became effective, practitioners scrambled to update partnership agreements to specify PR designation procedures, succession plans, and partner rights to indemnification if the PR’s actions result in partnership-level tax payments that fall on current partners for prior year adjustments. Form 8979 is often the symptom – the fix is in the partnership agreement.
Common Mistakes That Slow Things Down
- Filing Form 8979 to change the PR on a return, not during an audit – Form 8979 is only for changes during an active IRS audit proceeding. Annual PR designations on Form 1065 happen directly on the return. Using Form 8979 outside an audit context is procedurally incorrect and will be rejected.
- Failing to designate a successor when revoking or resigning – The most common and costly mistake: the PR resigns (or is revoked) without immediately designating a successor. This leaves the partnership without an authorized representative during a live audit, which gives the IRS significant procedural advantage.
- Omitting the designated individual for entity PRs – When the partnership representative is an entity, the form requires identification of a specific designated individual. Leaving this blank causes the form to be rejected and delays the PR change during an active audit.
- Sending Form 8979 to the wrong IRS office – Form 8979 must be submitted to the IRS agent or office handling the specific audit, not to a general filing address. Pull the submission address from the audit notification correspondence, not from general IRS contact lists.
- Assuming revocation is automatic – Revocations require IRS consent. Filing Form 8979 does not automatically revoke the existing PR. The outgoing PR remains the binding authority until the IRS formally accepts the revocation. Track this confirmation actively.
- New PR not reviewing prior audit history – A successor PR who assumes the role without reviewing the full audit file may inadvertently ratify prior positions, miss open deadlines, or be surprised by informal representations the prior PR made to the examiner.
Practical Checklists You Can Reuse
Copy these into your internal wiki or SOP.
Form 8979 Filing Checklist
- Confirm an IRS BBA audit proceeding is active for the partnership (Form 8979 is only for active proceedings)
- Identify the action to take: revocation, resignation, or new designation (or a combination)
- Gather current PR’s complete information: name, address, TIN, contact information
- Gather new PR’s complete information, including TIN; if entity PR, also gather designated individual’s information
- Identify the IRS agent or office handling the audit – this is where the form is submitted
- Obtain required signatures: partnership authorized signer, outgoing PR (for resignation), new PR (for designation)
- Submit Form 8979 to the correct IRS address with confirmation of receipt
- Follow up to confirm IRS acceptance of the PR change before assuming it is effective
- Notify all relevant parties (partners, attorneys, accountants) that the PR has changed
- Ensure the new PR has access to all prior audit correspondence and file materials
New PR Audit File Review Checklist
- Review all IRS correspondence received to date, including initial audit notice, IDR requests, and any proposed adjustments
- Identify all representations or concessions made by the prior PR to the IRS examiner
- Confirm all outstanding IRS deadlines (IDR response dates, meeting scheduled dates)
- Review the partnership agreement for PR authority provisions and any indemnification rights
- Confirm partnership representative eligibility: U.S. substantial presence, valid TIN, U.S. address and phone
- Coordinate with the partnership and legal counsel on strategy going forward
- Document the transition in writing so the audit file reflects when authority transferred
For Accounting Firms – Keep Delivery Smooth While You Scale
BBA audit support – including PR designation management, Form 8979 filings, audit response coordination, and partner notification workflows – is an emerging practice area for CPA firms that serve partnership clients. As the IRS ramps up BBA partnership audit activity, firms need structured workflows to manage these engagements without creating partner exposure from missed procedural deadlines.
Accountably works with CPA and EA firms that need offshore delivery capacity for structured compliance and documentation tasks, including supporting the administrative workflows that BBA audit engagements require. We keep this mention brief on purpose, your process comes first.
FAQs About Form 8979
What is Form 8979 used for?
Form 8979 is used to revoke a partnership representative designation, notify the IRS of a partnership representative’s resignation, or designate a new partnership representative after an IRS BBA centralized partnership audit proceeding has begun. It is not used for the annual PR designation on Form 1065, which happens directly on the partnership return.
When can a partnership revoke a partnership representative?
A partnership can revoke a partnership representative’s designation during an active BBA audit proceeding by filing Form 8979 and requesting IRS consent. The revocation is not effective until the IRS formally accepts it. Revocations must generally be accompanied by the designation of a successor PR to avoid leaving the audit without an authorized representative.
Does a partnership representative have to be a partner?
No. A partnership representative can be any person – including a non-partner such as the partnership’s CPA or attorney – as long as they have “substantial presence” in the United States. This means a U.S. taxpayer identification number, a U.S. address, a U.S. telephone number, and availability to meet with the IRS in person in the U.S. Entity representatives must also designate a specific human “designated individual.”
What happens if a partnership has no valid partnership representative during an audit?
If a partnership fails to maintain a valid partnership representative during a BBA audit proceeding, the IRS has authority to designate a PR from among the partnership’s current partners. The IRS-appointed PR has the same broad authority as a voluntarily designated one, including the ability to bind the partnership and all its partners on all audit matters. Avoiding this outcome is a primary motivation for filing Form 8979 promptly when a PR change is needed.
Can the partnership representative resign during an audit?
Yes. A partnership representative can resign during a BBA audit by filing Form 8979 with the IRS. The resignation should be accompanied by a designation of a successor PR. The outgoing PR remains authorized until the IRS formally acknowledges the resignation, so the outgoing PR should avoid taking additional actions on behalf of the partnership after submitting the resignation form.
This article is educational, not tax advice. Rules change, and states differ. Confirm thresholds, deadlines, and elections against the current IRS instructions for your year and facts.