Ezel / IRS Rulings / 200912013

CCA 200912013: Partner-level income from an outside-basis change required an affected-item notice

Number
200912013
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Affected Item
Topics
Procedure, penalties, and administration
Code sections
§ 6231
Ruling dated
February 13, 2009
Publicly released
March 20, 2009
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 2009, 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 2009
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 discussed partnership adjustments that could affect a partner's outside basis. The IRS could change partnership liabilities, determine whether forgiven liabilities generated cancellation-of-debt income, adjust capital accounts, and adjust contributions and the partners' bases in contributed amounts. If those partnership-level changes altered a partner's outside basis and produced additional income only at the partner level, the IRS had to issue the partner an affected-item notice of deficiency. The notice had to be issued within one year after the partnership proceeding ended.

Ruling snapshot

  • Question: How should the IRS assess partner-level income caused by partnership adjustments that changed outside basis?
  • Outcome: Advice given: issue an affected-item notice of deficiency within one year after completion of the partnership proceeding.
  • Key authorities: Affected-item rules under IRC § 6231.

Full text (IRS public release)

ID: CCA_2009021310365237 Number: 200912013
Release Date: 3/20/2009
Office: --------------
UILC: 6231.05-00

From: -------------------
Sent: Friday, February 13, 2009 10:36:54 AM
To: ----------------
Cc: -----------
Subject: RE: Inside-Outside Basis Statute question ---------

You can change the amount of partnership liabilities reflected on the partnership return. You can determine whether any liabilities were forgiven generating COD income. You can adjust capital accounts. You can adjust both the amount of contributions and the partners basis in the contributed amounts. These will all have a flow though effect on the computation of outside basis. If the computational effect of these amounts results in a change to outside basis of the partner, and that change then results in additional income only at the partner level, you would need to issue an affected item notice of deficiency to the partner for that income within one year of the completion of the partnership proceeding.

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace