- For new partnerships, the deferral period is no longer than three months and
- the partnership is not part of a tiered structure. IRC §444(b)(1) and (d)(3).
The policy and purpose of §444 is permitting existing business entities to retain existing nonconforming entity taxable years or to change to years of lesser deferral without sacrificing revenue and to permit new entities to obtain limited deferred periods in order to meet the concerns of tax return preparers.
The "toll charge" for a partnership §444 election is payment of the entity-level excise tax imposed by §7519.