Ezel / IRS Rulings / 200848043

CCA 200848043: Computationally traceable K-1 inconsistency may be directly assessed through tiers

Number
200848043
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Effect of Failure to Notify
Topics
Procedure, penalties, and administration
Code sections
§ 6222
Ruling dated
July 17, 2008
Publicly released
November 28, 2008
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2008, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2008
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advised that the IRS could directly assess a partner when an inconsistent filing was computationally traceable to a source partnership item. If the discrepancy could not be resolved by purely mathematical tracing, the IRS had to issue an affected-item notice. When an intermediate partnership filed inconsistently without notifying the IRS, the IRS could assess every indirect partner regardless of how many additional tiers intervened.

Ruling snapshot

  • Question: When may the IRS directly assess K-1 inconsistencies through tiered partnerships?
  • Outcome: Advice given. Direct assessment is available for computationally traceable items and undisclosed intermediate-tier inconsistencies; otherwise use an affected-item notice.
  • Key authorities: IRC § 6222; Treas. Reg. § 301.6222(a)-(c)(2).

Full text (IRS public release)

1

ID: CCA-717943-08 Number: 200848043
Office: --------------
Release Date: 11/28/2008

UILC: 6222.03-00

From: -------------------
Sent: Thu 7/17/2008 9:43 AM
To: --------------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
--------------
Subject: RE: K-1 Discrepancies

  1. If the inconsistent filing is directly and computationally traceable to an item of ABC, we can directly
    assess the partner of XYZ. If we can't tell as a purely mathematical tracing matter, we would have to
    issue an affected item notice to resolve the discrepancy.

  2. If XYZ filed inconsistently, and failed to notify us, we can assess all indirect partners regardless of the
    number of further tiers. Treas. Reg. 301.6222(a)-(c)(2)

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