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 forced to consider several options to cure the deficiency, which have varying levels of difficulty, complexity and sensitivity for underlying LPs. That exercise has taken on greater importance due to the IRS’ push to perform additional partnership audits amidst favorable rules introduced by the Bipartisan Budget Act of 2015 (BBA), as well as an increased budget from the Biden administration for 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 that managers confront with each option for curing 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).