Coalition of

Publicly  

Traded  

Partnerships__________________________________

Summary of Past Achievements

    The Coalition of Publicly Traded Partnerships, a trade association representing publicly traded partnerships and those who work with them, has had a sizeable impact on federal tax policy towards PTPs.  Its accomplishments since its origin in 1983 include:

• Preserved permanent partnership taxation for natural resources and real estate PTPs when taxation of PTPs was included in the 1987 tax bill, and won a 10-year grandfather period for other, Anonqualifying,@ PTPs. In 1997, the grandfather period was extended permanently for nonqualifying PTPs willing to pay a small excise tax.

• Achieved Congressional passage in 1999 of a provision to make PTPs a qualifying income source for mutual funds (as part of a bill vetoed by the President for unrelated reasons).  Efforts to enact this legislation continue.

• Obtained repeal in 1993 of a discriminatory provision treating all PTP income (allocated to a tax-exempt organization), as unrelated business taxable income.  PTPs are now treated like other partnerships.

• Obtained exclusion of publicly traded partnerships from several states' requirements that partnerships withhold tax on distributions to nonresident partners, as well as model withholding legislation proposed by the Multistate Tax Commission. Efforts with respect to state tax legislation continue.

• Obtained favorable clarification of the 1987 provisions from the Treasury Department and in the 1988 technical corrections bill.

• Persuaded the IRS to provide a safe harbor (based on SIC codes) for determining whether a proposed business activity is within the same line of business as existing activities.As required by the transition rule for the 1987 legislation, this provided "grandfathered" PTPs with the certainty needed to plan future business activities.

• Persuaded the IRS to permit the use of curative allocations in its regulations dealing with property contributed by a partner under section 704(c).

• Worked with the Congressional tax committees and the Treasury Department to develop simplified PTP tax reporting legislation.  This legislation was enacted as part of the Taxpayer Relief Act of 1997.

• Persuaded the Senate Finance Committee to favorably modify proposed legislation in the 103rd Congress (not enacted) to require partnership employees (investing in a partnership), to pay self-employment tax.

• Successfully influenced Congressional legislation to regulate partnership roll-up transactions to exclude transactions involving only PTPs, and to make the rules for covered transactions practicable.

• Blocked efforts to include the taxation of PTPs as corporations in the Deficit Reduction Act of 1984 and the Tax Reform Act of 1986, and played an instrumental role in removing taxation of partnerships with more than 35 partners as corporations from the Treasury Department's 1984 tax reform proposal.

• Modified partnership provisions in the Deficit Reduction Act of 1984 that would have adversely affected PTP operations.