The Centralized Partnership Audit Regime allows the IRS to make adjustments at the partnership level rather than the partner level.
The IRS refers to these as 'TEFRA' partnerships, because they were created by the Tax Equity and Fiscal Responsibility Act of 1982, to help the IRS deal with large tax shelters.
TEFRA procedures were designed to streamline examinations of partnerships by requiring that partnership issues be handled in a single, unified partnership-level proceeding instead of multiple proceedings at the partner level.
TEFRA mainly imposes procedural requirements on IRS Agents in examinations. It doesn't affect the entity being audited very much, except that the paperwork and notifications are different.
Partnerships whose tax years begin after September 3, 1982 are TEFRA partnerships unless they meet the definition of a small partnership found in Internal Revenue Code section 6231(a)(1)(B)(i). This is also commonly referred to as the "Small Partnership Exception.
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