Common use of Partnership Audit Rules Clause in Contracts

Partnership Audit Rules. 12.7.1 The Manager shall be the “partnership representative” for purposes of Code Sections 6223 and 6231 and shall, at the Company’s expense, cause to be prepared and timely filed after the end of each taxable year of the Company all federal and state income tax returns required of the Company for such taxable year. If any state or local tax law provides for a partnership representative or Person having similar rights, powers, authority or obligations, the Manager shall also serve in such capacity. 12.7.2 If any audit adjustment results in an underpayment of tax that is imputed to the Company and would be assessed and collected at the Company level in the period that the adjustment becomes final, the Company may, in the sole discretion of the Manager, elect: (a) to pay an imputed underpayment as calculated under Code Section 6225(b) with respect to such adjustment, including interest, penalties and related tax (“Imputed Underpayment”) in the Adjustment Year or otherwise take the Internal Revenue Service adjustment into account in the Adjustment Year. The Manager shall use commercially reasonable efforts to reduce the amount of such Imputed Underpayment on account of the tax-exempt status (as defined in Code Section 168(h)(2)) of any Members as provided in Code Section 6225(c)(3). Each Member agrees to indemnify and hold harmless the Company and the Manager from and against any liability with respect to the Member’s proportionate share of any Imputed Underpayment, regardless of whether such Member is a Member in the Adjustment Year, and to promptly pay its proportionate share of any Imputed Underpayment to the Company within 15 days following the Manager’s request for payment and any amount that is not funded shall be treated as a Tax Payment under Section 4.12. 1. Each Member’s (or former Member’s) proportionate share shall be determined by the Manager in good faith taking into account each Member’s (or former Member’s) particular status, including its tax-exempt or non-United States status, its interest in the Company in the Reviewed Year, and its timely provision of information necessary to reduce the amount of Imputed Underpayment set forth in Code Section 6225(c); or (b) under Code Section 6226(a), to cause the Company to issue adjusted Schedule K-1s or any other similar statement prescribed by the Code, Treasury Regulations or other administrative guidance published by the Internal Revenue Service or other taxing authority to each applicable Member for the Reviewed Year, who will then be required to pay their allocable share of tax otherwise attributable to the Company. Each Member hereby agrees and consents to such election and agrees to take any action, and furnish the Manager with any information necessary to give effect to such election, as required by such Code Section and applicable Treasury Regulations or other administrative guidance published by the Internal Revenue Service or other taxing authority.

Partnership Audit Rules. 12.7.1 The Manager shall be the “partnership representative” for purposes of Code Sections 6223 and 6231 and shall, at the Company’s expense, cause to be prepared and timely filed after the end of each taxable year of the Company all federal and state income tax returns required of the Company for such taxable year. If any state or local tax law provides for a partnership representative or Person having similar rights, powers, authority or obligations, the Manager shall also serve in such capacity. 12.7.2 If any audit adjustment results in an underpayment of tax that is imputed to the Company and would be assessed and collected at the Company level in the period that the adjustment becomes final, the Company may, in the sole discretion of the Manager, elect: (a) With respect to pay an imputed underpayment as calculated any audit of the Partnership, the Partnership Representative shall cause the Partnership to make a timely election under Section 6226(a)(1) of the Code Section 6225(b(a "Push-Out Election") with respect to any imputed underpayment for the reviewed year or years. After such adjustmentPush-Out Election is made, the Partnership shall timely furnish to the IRS and each person that was a Partner of the Partnership during the reviewed year to which such underpayment relates a statement (the "Section 6226 Statement") of such Partner's share of any adjustment to income, gain, loss, deduction or credit for the reviewed year, as determined in the FPAA. To the extent the Partners' respective shares of such adjustments are not determined in the FPAA, AHF shall determine such shares based on the allocations described in Exhibit J of this Agreement for the reviewed year, which determination shall be made in the reasonable discretion of AHF. Each Partner receiving a Section 6226 Statement with respect to a reviewed year shall timely report and pay such Partner's tax liability imposed by the Code for the Partner's taxable year that includes the date on which the Section 6226 Statement was furnished to the Partner, which tax liability shall include the "adjustment amounts" described in Section 6226(b)(2) of the Code, including interest, interest determined in the manner and at the underpayment rate specified in Section 6226(c)(2) of the Code and any applicable penalties and related additions to tax (“Imputed Underpayment”which are determined at the Partnership level under Sections 6221(a) in the Adjustment Year or otherwise take the Internal Revenue Service adjustment into account in the Adjustment Year. The Manager shall use commercially reasonable efforts to reduce the amount of such Imputed Underpayment on account and 6226(c)(1) of the tax-exempt status (as defined in Code Section 168(h)(2)) of any Members as provided in Code Section 6225(c)(3but imposed on the Partners). Each Member agrees such Partner shall timely provide to the Partnership such evidence as AHF shall reasonably require to establish the Partner's compliance with the requirements of Section 6226 of the Code. (b) If for any reason the Partnership is liable for any tax, imputed underpayment, interest or penalty as a result of any audit under the Audit Rules (collectively, "Partnership Audit Payments"), then: (i) Each person who was a Partner during any portion of the reviewed year (including, without limitation, former Partners) shall indemnify and hold harmless pay the Company and the Manager from and against any liability with respect Partnership an amount equal to the Member’s such Person's proportionate share of any Imputed Underpaymentsuch liability, regardless of whether based on the amount each such Member is a Member in Person should have borne (computed at the Adjustment Yeartax rate used to compute Partnership's liability) had the Partnership's tax return for such taxable year reflected the audit adjustment, and the expense for the Partnership's payment of such Partnership Audit Payments shall be specially allocated to promptly pay its proportionate such Persons (or their successors) in such proportions. Notwithstanding the foregoing, such apportionment of liability shall also take into account the extent to which the Partnership's imputed underpayment was modified by adjustments under Section 6225(c) of the Code (to the extent approved by the IRS) and attributable to (A) a particular Partner's tax classification, tax rates, tax attributes, the character of tax items to which the adjustment relates, and similar factors, or (B) the Partner's filing of an amended return for the Partner's taxable year that includes the end of the Partnership's reviewed year and payment of required tax liability in a manner that complies with Section 6225(c)(2) of the Code. To the extent an imputed underpayment results from the reallocation of the distributive share of any Imputed Underpayment Partnership tax item from one Partner to another, the Company within 15 days following the Manager’s request for payment and Partner(s) whose shares of any amount that is not funded item of income or gain are increased, or whose shares of any item of loss, deduction or credit are decreased, shall be treated as a Tax Payment under Section 4.12bearing the economic burden of such imputed underpayment. 1(ii) The Partnership Representative shall, in consultation with the Accountants, determine a tentative apportionment of the Partnership Audit Payments among the Partners and former Partners and shall notify such Persons as soon as reasonably practicable of its determination and the facts and analysis supporting such determination. Each Member’s (such Partner or former Member’sPartner shall have 30 days to object to such apportionment and propose an alternative basis of apportionment or adjustment thereto and the basis therefor. The Partnership Representative shall then determine a final apportionment in its reasonable discretion and shall, as soon as reasonably practicable thereafter, deliver a Notice to all applicable Persons of such determination after which each such Person shall remit any amounts due to the Partnership within 15 days thereafter. (iii) proportionate share The Partnership, at the direction of either the General Partner or AHF, shall be determined by apply any distributions, fees or other amounts payable under this Agreement to any Partner or any Affiliate of such Partner to offset any payments due to the Manager in good faith taking into account each Member’s Partnership from such Partner pursuant to this Section 6.21(b). (c) The provisions of this Section 6.21 shall survive the termination or former Member’s) particular status, including its tax-exempt dissolution of the Partnership or non-United States status, its the termination of any Partner's interest in the Company in Partnership and shall remain binding on the Reviewed YearPartners for as long of a period of time as is necessary to resolve with any taxing authorities any and all matters regarding the United States federal income tax matters of the Partnership, and its timely Partners or former Partners. (d) Notwithstanding any other provision of information necessary this Section 6.21, if the Partnership Representative is not AHF (i) the Partnership Representative shall not take any action under this Section 6.21 which would have a materially adverse tax impact on AHF if such action is not Consented to reduce by AHF and (ii) the amount Partnership Representative shall keep the Partners promptly informed of Imputed Underpayment set forth in Code Section 6225(c); orany tax matters involving the Partnership. (be) under Code The Partners hereby Consent to any amendments to this Section 6226(a), 6.21 that AHF determines are reasonably necessary and appropriate to cause the Company to issue adjusted Schedule K-1s or any other similar statement prescribed by the Code, address additional guidance provided in Treasury Regulations or other administrative IRS guidance published by the Internal Revenue Service or other taxing authority to each applicable Member for the Reviewed Year, who will then be required to pay their allocable share of tax otherwise attributable relating to the Company. Each Member hereby agrees and consents to such election and agrees Audit Rules, or to take any action, and furnish into account subsequently enacted amendments to the Manager with any information necessary to give effect to such election, as required by such Code Section and applicable Treasury Regulations or other administrative guidance published by the Internal Revenue Service or other taxing authorityAudit Rules.

Partnership Audit Rules. 12.7.1 The Manager Principal Member shall be entitled, in its sole discretion to make an election under Section 6221(b) of the “partnership representative” Code on each income tax return for purposes of Code Sections 6223 and 6231 and shall, at the Company’s expense, cause to be prepared and timely filed after the end of each taxable year of in which the Company all federal and state income tax returns required of is eligible under applicable Law to make such an election. For any taxable year for which Principal Member does not make such election or the Company for such taxable year. If any state or local tax law provides for a partnership representative or Person having similar rights, powers, authority or obligations, the Manager shall also serve in such capacity. 12.7.2 If any audit adjustment results in an underpayment of tax that election is imputed to the Company and would be assessed and collected at the Company level in the period that the adjustment becomes final, the Company may, in the sole discretion of the Manager, electotherwise unavailable under applicable Law: (a) The Principal Member shall serve as the Company’s “partnership representative” within the meaning of Section 6223(a) of the Code, and if a “designated individual”, as that term is defined in Treasury Regulations Section 301.6223-1(b)(3) (a “Designated Individual”), is required to pay be appointed under the Partnership Tax Audit Rules, the Principal Member shall designate the individual to serve as the Designated Individual. In accordance with the Partnership Tax Audit Rules and to the extent provided therein, the Principal Member shall have the authority to remove and replace the Designated Individual and designate such Designated Individual’s successor. To the extent that the Principal Member reasonably deems necessary, each Member shall take all actions reasonably required to cause such designations and removals to be effective under the Partnership Tax Audit Rules. The Principal Member and the Designated Individual shall have the power and authority granted to each in such capacities under the Partnership Tax Audit Rules and shall have the authority to otherwise control any such audit or examination at the expense of the Company (including by engaging accountants, legal counsel or experts), and each shall exercise (and the Principal Member shall cause the Designated Individual to exercise) such power and authority in a manner consistent with this Agreement. (b) The Principal Member, in its reasonable discretion exercised in good faith, shall have the right to make any and all elections and to take any actions that are available to be made or taken by the Principal Member or the Company under the Partnership Tax Audit Rules (including any election under Section 6226 of the Code). To the extent that an imputed underpayment as calculated election under Section 6226(a) of the Code Section 6225(b) with respect is available under applicable Law, the Principal Member shall, in its sole discretion, determine whether to cause the Company to make such election within the time period required by applicable Law, and if any election is made, the Principal Member shall furnish to each Member for the year under audit a statement of the Member’s share of any adjustment set forth in the notice of final partnership adjustment, including interest, penalties and related tax (“Imputed Underpayment”) in the Adjustment Year or otherwise each Member shall take the Internal Revenue Service such adjustment into account in as required under Section 6226(b) of the Adjustment Year. The Manager Code. (c) To the extent that the Company does not make an election under Section 6226 of the Code, the Principal Member shall use commercially reasonable efforts to reduce the amount of such Imputed Underpayment on account make any modifications available under Sections 6225(c)(3), (4) and (5) of the tax-exempt status (as defined in Code Section 168(h)(2)) of Code, to the extent that such modifications would reduce any Members as provided in Code Section 6225(c)(3)taxes payable by the Company. Each Member agrees to indemnify and hold harmless reasonably cooperate with the Company Principal Member and the Manager Designated Individual and to do or refrain from and against doing any liability or all actions reasonably requested by the Principal Member or the Designated Individual with respect to the conduct of an audit or examination under the Partnership Tax Audit Rules. The economic burden of the imputed underpayment within the meaning of Section 6225 of the Code (including any interest and penalties imposed thereon) that are payable by the Company for any taxable year (the “Reviewed Year” and such payments, collectively the “Partnership Audit Payments”) shall be reasonably apportioned by the Principal Member among the Members and any former members. Such apportionment shall be based on the manner in which the adjusted tax items are allocated among the Members under the Agreement for the Reviewed Year and taking into account the extent to which the Company’s imputed underpayment was modified by adjustments (to the extent approved by the IRS or permitted by the Code or Treasury Regulations) attributable to (i) a particular Member’s proportionate share (or any direct or indirect interest holder of any Imputed Underpaymenta Member’s) tax classification, regardless tax rates, tax attributes, the character of whether such Member is tax items to which the adjustment relates or similar factors or (ii) a Member’s filing of an amended return and payment of taxes in a manner that complies with Section 6225(c)(2) of the Code. The portion of the Partnership Audit Payments that are apportioned to a Member in the Adjustment Year, and to promptly pay its proportionate share of any Imputed Underpayment to the Company within 15 days following the Manager’s request for payment and any amount that is not funded or former Member shall be treated as a Tax Payment payment of Withheld Taxes under Section 4.125.1(b) with respect to such Member and shall be subject to the provisions of Section 5.1(b). 1. Each (d) Any references in this Section 7.5 to the Code shall be deemed to include references to any corresponding or similar provision of state or local Law. (e) Any reasonable third-party costs or expense of the Principal Member or the Designated Individual acting in its capacity as such in connection with the tax matters of the Company shall be paid or reimbursed by the Company and shall be treated as a cost or expense of the Company. (f) The provisions contained in this Section 7.5 shall survive a Member’s (or former Member’s) proportionate share shall ceasing to be determined by the Manager in good faith taking into account each Member’s (or former Member’s) particular status, including its tax-exempt or non-United States status, its interest in a Member of the Company in and/or the Reviewed Yeartermination, dissolution, liquidation and its timely provision winding up of information necessary to reduce the amount of Imputed Underpayment set forth in Code Section 6225(c); or (b) under Code Section 6226(a), to cause the Company to issue adjusted Schedule K-1s or any other similar statement prescribed by the Code, Treasury Regulations or other administrative guidance published by the Internal Revenue Service or other taxing authority to each applicable Member for the Reviewed Year, who will then be required to pay their allocable share of tax otherwise attributable to the Company. Each Member hereby agrees and consents to such election and agrees to take any action, and furnish the Manager with any information necessary to give effect to such election, as required by such Code Section and applicable Treasury Regulations or other administrative guidance published by the Internal Revenue Service or other taxing authority.

Partnership Audit Rules. 12.7.1 (a) The Manager Company’s “Partnership Representative” within the meaning of Section 6223(a) of the Code (the “PTR”) shall be the “partnership representative” for purposes of Code Sections 6223 and 6231 and shallindividual designated as such by the Managing Member, who shall act at the Company’s expensedirection of the Managing Member. Each Member hereby consents to such designation and agrees that, cause upon the request of the PTR, it shall execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent. The individual designated shall execute a separate agreement at the request of the Managing Member pursuant to which such individual agrees to be prepared bound by and timely filed after to comply with the end provisions of each taxable year this Section 8.5. (b) The PTR shall use its commercially reasonable efforts to apply the rules and elections under Sections 6221-6241 of the Company all federal and state income Code (the “Partnership Audit Provisions”) in a manner that minimizes the likelihood that any Member would bear any material tax returns as a result of any audit or proceeding that is attributable to another Member (other than a predecessor in interest to the original Member). For such purposes, the PTR is authorized to (i) take any action required to cause the financial burden of any “imputed underpayment” (as determined under Section 6225 of the Company for such taxable year. If any state or local tax law provides for a partnership representative or Person having similar rights, powers, authority or obligations, the Manager shall also serve in such capacity. 12.7.2 If any audit adjustment results in Code) (an underpayment of tax that is imputed to the Company and would be assessed and collected at the Company level in the period that the adjustment becomes final, the Company may, in the sole discretion of the Manager, elect: (a) to pay an imputed underpayment as calculated under Code Section 6225(b) with respect to such adjustment, including interest, penalties and related tax (“Imputed Underpayment”) in and associated interest, adjustments to tax and penalties arising from a partnership-level adjustment that are imposed on the Adjustment Year Company to be borne by the Members and former Members to whom such Imputed Underpayment relates as determined by the PTR after consulting with the Company’s accountants or otherwise take the Internal Revenue Service adjustment other advisers, taking into account any differences in the Adjustment Year. The Manager shall use commercially reasonable efforts to reduce the amount of taxes attributable to each Member because of such Imputed Underpayment on account Member’s status, nationality or other characteristics; and (ii) make the election described in Section 6226 of the tax-exempt status Code, to take any and all actions necessary or appropriate in order to effect such election, and to take such other actions and make such other elections as are reasonably necessary or appropriate in order that the allocation among the Members (as defined in Code Section 168(h)(2)including Persons who are former Members) of any Members as provided in Code Section 6225(c)(3). Each Member agrees responsibility for taxes (including interest and penalties, if any, with respect to indemnify and hold harmless such taxes) imposed with respect to the income of the Company and the Manager from cost of contesting the Company adjustments is, to the greatest extent reasonably feasible, consistent with what it would have been if the Company had been eligible to elect, and against any liability had elected, out of the Partnership Audit Provisions. If the PTR makes an election under Section 6226 of the Code with respect to the Member’s proportionate share any audit adjustment of any Imputed Underpaymentitem of the Company’s income, regardless gain, loss, deduction or credit (or adjustment of whether such Member is a Member in the Adjustment Year, and to promptly pay its proportionate share allocation of any Imputed Underpayment to such items among the Company within 15 days following Members), each Member shall comply with the Manager’s request for payment and any amount that is not funded shall be treated as a Tax Payment under Section 4.12. 1. Each Member’s (or former Member’s) proportionate share shall be determined by the Manager in good faith taking into account each Member’s (or former Member’s) particular status, including its tax-exempt or non-United States status, its interest in the Company in the Reviewed Year, and its timely provision of information necessary to reduce the amount of Imputed Underpayment requirements set forth in Section 6226 of the Code Section 6225(c); or (b) under Code Section 6226(a), to cause the Company to issue adjusted Schedule K-1s or and any other similar statement prescribed by the Code, Treasury Regulations or other administrative applicable guidance published issued by the Internal Revenue Service or other the U.S. Treasury Department) with respect to such election. (c) The PTR shall have the sole discretion to determine all matters and shall be authorized to take any actions necessary or appropriate with respect to any audit, examination or investigation (including any judicial or administrative proceeding) of the Company by any taxing authority (including, without limitation, the allocation of any resulting taxes, penalties and interest among the Members and whether to make an election under Section 6226 of the Code with respect to any audit or other examination of the Company). With respect to any audit, examination or investigation (including any judicial or administrative proceeding) of the Company by any taxing authority, each applicable Member for shall timely provide such information as the Reviewed Year, who will then be PTR may reasonably request to reduce the amount of any resulting tax required to pay their allocable share of tax otherwise attributable to be paid by the Company. Each Member hereby agrees and consents shall file all tax returns with respect to such election and agrees to take Member’s distributive share of any actionitem of the Company’s income, gain, loss, deduction or credit in a manner consistent with the Company’s tax treatment of such item, and furnish no Member, without the Manager consent of the PTR, shall (i) file a request for administrative adjustment of Company items, (ii) file a petition with respect to any Company item or other tax matters involving the Company, or (iii) enter into a settlement agreement with any information taxing authority with respect to any Company items. (d) The Members acknowledge and agree that, in light of the enactment of the Partnership Audit Provisions, amendments may be necessary or appropriate to give effect this Agreement in order to such election, as required by such Code Section (i) address the Partnership Audit Provisions and applicable Treasury any Regulations or and other administrative guidance published by pronouncements of the Internal Revenue Service interpreting and applying the Partnership Audit Provisions and (ii) ensure that, in the event of a tax audit of the Company, the Persons who are Members during the Company’s tax year being audited (which may include former Members) bear the economic burden and benefit of any adjustments to the Company’s income, gain, loss, deduction or credit for such tax year being audited and the cost of contesting the Company adjustments (including, for example, amendments adding obligations for the Members and former Members to provide tax information to the Company in order to comply with the Partnership Audit Provisions and making changes to the distribution, contribution and indemnification sections of this Agreement), and the Managing Member shall have the authority to effect any such amendments it deems, in its sole discretion, to be necessary or appropriate. (e) The PTR shall receive no compensation for its services. All third-party costs and expenses incurred by the PTR in performing its duties in such capacity (including legal and accounting fees and expenses) shall be Operating Expenses. Nothing herein shall be construed to restrict the Company from engaging an accounting firm, law firm or other taxing authorityadviser to assist the PTR in discharging its duties hereunder. (f) The provisions contained in this Section 8.5 shall survive the termination of the Company and the withdrawal of a Member.