ACCT 616 Week 8 Case Study 4 Example

Reviewed by Thomas Kerrigan, MBA, CPA · Liberty University · Updated

This ACCT 616 Week 8 sample case study places a composite six-member LLC under examination by the IRS for its 2024 return, two years after one member sold out and a new one bought in. The paper explains why the LLC could not elect out of the centralized partnership audit regime, how an imputed underpayment of $33,300 would be computed on a $90,000 adjustment, what the partnership representative's sole authority means for the members, and why a push-out election would move the cost back to the 2024 members, at a higher interest rate, instead of the new member. A passage on faithfulness with what belongs to another closes it. Liberty University ACCT 616 holds this 100-point case for the last module/week of the MS in Accounting course, Module/Week 8, where Quiz 4 waits too.

CourseACCT 616 Advanced Topics in Individual and Pass-through Taxation (ACCT616)
Module/Week8
AssignmentCase Study 4
Paper typeCase study
Lengthabout 493 words, 2 double-spaced pages plus title page and references. Course guide: a final case of one or two pages on the centralized audit rules, APA-formatted with a running head and title page, its references naming two or more professional or scholarly works beyond the textbooks and Bible
FormatAPA 7 student paper
Points100
SchoolLiberty University Online
ProgramMS in Accounting
Where it sitsModule/Week 8 in Liberty's published ACCT 616 course guide; current sections can differ
UpdatedOctober 2026

Free sample paper for ACCT 616 Week 8

1

An Audit Under the Centralized Partnership Regime: Electing Out, the Imputed Underpayment and the Push-Out Choice

 

[Student Name]

School of Business, Liberty University

ACCT 616: Advanced Topics in Individual and Pass-through Taxation

Case Study 4

[Instructor Name]

[Date]

 

The partnership, members and figures are a composite written for this sample; the Code sections, regulation and Bible passage cited are real.

Why this part earns its pointsThe membership in both years is stated first, because the regime's problems come from the gap between them.
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An Audit Under the Centralized Partnership Regime: Electing Out, the Imputed Underpayment and the Push-Out Choice

The Facts

Northgate Fabrication LLC, taxed as a partnership, had six members in 2024: four individuals, an S corporation and Keystone Holdings LLC, itself taxed as a partnership. In 2025 one individual member sold her interest to Priya Raman. In 2026 the IRS examines the 2024 return and proposes to disallow $90,000 of deductions. The operating agreement names the managing member, Dale Ross, as partnership representative.

Why this part earns its pointsEligibility to elect out is tested member by member.
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Could the LLC Have Elected Out?

A partnership with 100 or fewer partners may elect out of the centralized regime on a timely return, but only if each partner is a person, a corporation of either type, an eligible foreign entity or a deceased partner's estate (I.R.C. § 6221, 2025). Keystone Holdings is a partnership, which the regulations under that section do not list as an eligible partner, so Northgate was ineligible for 2024 and the regime applies.

The Imputed Underpayment

Unless the partners act, the adjustment is assessed at the partnership level as an imputed underpayment, computed at the highest individual or corporate rate in effect for the reviewed year (I.R.C. § 6225, 2025). At 37 percent, $90,000 of disallowed deductions produces $33,300, plus interest and any penalty. Northgate would pay it in 2026, so the economic cost falls on the 2026 members, including Priya, who did not own any part of the LLC in 2024. Under the default rule, the partners who pay are not always the partners who benefited. Modifications can lower the figure, for example by showing that part of the adjustment belongs to a partner taxed at a lower rate or to a tax-exempt partner, or by having reviewed-year partners file amended returns (I.R.C. § 6225, 2025).

The Push-Out Election

Within 45 days of the final notice of partnership adjustment, Northgate may instead elect to push the adjustments out to its 2024 partners, who then take their shares into account on their own returns and pay the tax with interest at the underpayment rate plus two percentage points (I.R.C. § 6226, 2025). The departed member would pay her share, and Priya would pay nothing. The election shifts work as well as tax: the partnership must furnish each 2024 partner a statement of that partner's share of the adjustments, and each partner then works out the added tax for 2024 and for any later year the change affects.

Why this part earns its pointsThe representative's role is treated separately because every choice above is that person's to make.
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The Partnership Representative

The partnership representative has sole authority to act for the partnership in the audit, and the partners are bound by the representative's actions and by any settlement (I.R.C. § 6223, 2025). Dale Ross will decide whether to seek modifications and whether to push out, and no member, including Priya, has a statutory right to be heard.

Recommendation

Jesus asked who would entrust true riches to someone not faithful with what belongs to another (English Standard Version Bible, 2001/2016, Luke 16:12). Dale should make the push-out election, which places the cost on the partners who enjoyed the deductions, and the members should amend the operating agreement to require the representative to consult them and to make the election in future audits.

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References

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

I.R.C. § 6221 (2025).

I.R.C. § 6223 (2025).

I.R.C. § 6225 (2025).

I.R.C. § 6226 (2025).

What the ACCT 616 Week 8 instructions ask

Case Study 4 closes ACCT 616 in Module/Week 8, alongside Quiz 4 and the last chapter of Ricketts and Tunnell, chapter 16, with its presentation. Working from facts supplied in the instructions, students write up to two pages under APA rules, putting the running head on a title page and finishing with their references. At least two scholarly or professional sources must appear there besides the textbooks and the Bible. Ending on a procedural case is deliberate: by this week students have computed a partnership's income, allocated it and traced it to the partners' returns, and the last question is what happens when the IRS changes those numbers years later, after the partners themselves have changed.

How this ACCT 616 Week 8 example is built

The sample paper opens with the LLC's membership in 2024 and in 2026, since the change in members drives the analysis. Its first section asks whether the LLC could have elected out of the regime and finds that one member, itself a partnership, made it ineligible. The second computes the imputed underpayment at the highest individual rate and explains who would bear it if the partnership simply paid. The third explains the push-out election, its 45-day deadline and its cost in interest. A short section on the partnership representative follows, because that person makes every one of these choices. The recommendation weighs fairness to the new member and closes with a passage from Luke on stewardship of what belongs to others.

ACCT 616 Week 8 grading rubric: where the points go

Grading for the final case centers on correct application of the centralized audit rules: eligibility to elect out and its limits, the computation of the imputed underpayment, the push-out election with its deadline and interest cost, and the binding authority of the partnership representative. Each rule should be cited to the Code or the regulations. Instructors also reward attention to the change in members, since the regime's main fairness problem is that current partners can bear the cost of earlier years. Format marks follow the earlier cases, a ceiling of two pages, APA style with running head, title page and reference entries, and two or more scholarly or professional sources that are not the textbooks or the Bible.

ACCT 616 Week 8 help: mistakes that cost points

Start with the membership in the year under audit and in the year the audit ends, because the regime is built around that gap. Check whether every partner is an eligible type before discussing the election out; a single partnership or trust member blocks it. Compute the imputed underpayment at the highest rate in effect for the reviewed year and say that modifications can lower it. Explain who pays under each choice, and remember that the push-out election must be made within 45 days of the final notice and carries a higher interest rate. Name the partnership representative's authority to bind everyone. Recommend a step for the operating agreement so the next audit is handled by a clear rule.

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ACCT 616 Week 8 questions, answered

What is ACCT 616 Case Study 4?

It is the course's closing case, 100 points in Module/Week 8 next to Quiz 4, asking what happens when the IRS audits an LLC under the partnership rules.

Where can I find a free ACCT 616 Week 8 sample paper?

This page offers a complete ACCT 616 Week 8 case study sample on an LLC audited under the centralized partnership audit regime, covering the imputed underpayment and the push-out election.

Who can elect out of the centralized partnership audit regime?

Only a partnership of 100 partners or fewer whose members are all people, corporations of either kind, a deceased partner's estate or certain foreign entities; one partner that is itself a partnership or a trust rules it out.

What is a push-out election?

An election under Section 6226, made within 45 days of the final notice of adjustment, that sends the audit adjustments to the reviewed-year partners, who pay the tax with interest at a rate two points higher.

What else is due in ACCT 616 Module/Week 8?

Quiz 4 is taken the same week as the final case study, and students read chapter 16 of Ricketts and Tunnell with its presentation to close the course.

Use it as a model, or ask for your own

This paper is an original model written by our desk for study. It is not a submitted student paper and not an official Liberty University document. Read it for structure and reasoning, then write your own to the instructions in your Canvas course. If you want a version built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.

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