For fund managers forced to endure an IRS partnership audit, navigating that process is merely part of the battle. In situations when an imputed underpayment of taxes is identified by the IRS, fund managers are then forced to consider several options – ranging in difficulty, complexity and sensitivity for underlying limited partners – to cure the deficiency. That exercise has taken on greater importance amidst the IRS’ push to perform additional partnership audits through favorable rules introduced by the Bipartisan Budget Act of 2015 (BBA), as well as an increased budget from the Biden administration and more auditors. Those developments were covered in a recent program sponsored by Strafford CLE Webinars featuring Holland & Knight partners Mary A. McNulty and Lee S. Meyercord. This second article in a two-part series details potential issues managers confront with each option available to cure imputed underpayments unearthed in IRS partnership audits. The first article discussed the current status of IRS partnership audits; explained the BBA; identified provisions managers should include in their fund documents; and outlined pre-audit and audit processes. See our two-part series on BBA issues for private funds: “How Current Regulations Complicate IRS Audits of Partnerships” (Apr. 21, 2016); and “How Revised Regulations Facilitate IRS Audits of Partnerships” (Apr. 28, 2016).