Ezel / IRS Rulings / 200848052

CCA 200848052: Grantor trust or disregarded LLC prevents small-partnership exception

Number
200848052
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Exception for Small Partnerships
Topics
Procedure, penalties, and administration
Code sections
§ 6231
Ruling dated
July 22, 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 TEFRA small-partnership exception applied only when every partner was a natural person, C corporation, or estate. A pass-through entity could not be a partner. A grantor trust or disregarded LLC as a partner therefore made the partnership ineligible for the exception and subject to TEFRA partnership procedures.

Ruling snapshot

  • Question: Does a grantor trust or disregarded LLC partner qualify for the TEFRA small-partnership exception?
  • Outcome: Advice given. No; either type of partner makes the partnership subject to TEFRA.
  • Key authorities: IRC § 6231.

Full text (IRS public release)

ID: CCA-722212-08 Number: 200848052
Office: ----------
Release Date: 11/28/2008

UILC: 6231.01-01

From: ----------------------------
Sent: Tue 7/22/2008 9:20 PM
To: ------------------
Cc: ----------------------------
Subject: RE: Quick TEFRA question

The small partnership exception only applies if all of the partners are natural persons, C corporations or estates. There can be no pass-thru entities as partners. A grantor trust would make the partnership ineligible for the small partnership exception, and thus, would be subject to the TEFRA partnership provisions. The same is true for a disregarded LLC.

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