I am a partner in an Llc gone bad. As it stands the company is still in business and the Llc is in tact. My 2006 taxes were filed as an owner with the proper profit and loss statements. Now one of the other partners, along with his attorney, have instructed the accountant to complete the statements with just him. How will that affect my situation with the IRS? Can Should I contact the IRS to investigate? I can not afford an attorney as all of my funds are tied up in the investment. Can anyone help?

When you have a partnership, the partnership files Form 1065 and does not pay any taxes. The profit of a partnership is distributed among the partners. For this the partnership issues Form K-1 to the partners. Every partner is responsible for filing his/her own taxes.
What do you mean by "statements with just him?" Why can't he get his K-1 statement?

The partnership was very short lived and killed by greed. One partner is trying to be sneaky and get around by any means necessary. He has no regard for the law. His attorney has instructed the accountant to conduct all tax matters as a sole owner. I just want to make sure I am in good standing with the IRS.

Vasquez:

The courts may be the only way to correct this issue. It looks like what your ex-partner is attempting to do is illegal, because a partnership that files as a sole proprietorship is filing an incorrect return.

A phone call to the IRS would not hurt in this case, because they can address the issue directly to the other partner if need be.

Vasquez, it appears that you did not terminate the partnership when it was required. "A partnership terminates when at least 50% of the total interest in partnership capital and profits is sold or exchanged within a 12-month period, including sale or exchange to another partner." Evidently, you need to get more information based on your situation.

MukatA:

Legally, a partnership is terminated when any of the partners expresses a desire to terminate the partnership. The remaining partners then initiate a NEW partnership, or, even there are only two partners, they go their separate ways.

For the IRS, there is a requirement for one LAST partnershipo return to dispose of the partnership assets and assess final taxes due by the partners via the Schedules K-1.