Ezel / IRS Rulings / 200913035

CCA 200913035: TEFRA applied to decide that a purported partnership did not exist

Number
200913035
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Similar Rules in Certain Cases
Topics
Procedure, penalties, and administration
Code sections
§ 761, § 6231, § 6233
Ruling dated
September 11, 2008
Publicly released
March 27, 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 considered TEFRA's application to an owner and its disregarded entity that had filed a partnership return. The advice agrees that no partnership actually existed because a person cannot form a partnership with itself under sections 761 and 6231(a). Even so, section 6233(b) and its regulations made TEFRA applicable to determine that the purported partnership did not exist. The small-partnership exception was unavailable if the LLC was listed as a partner because Revenue Ruling 2004-88 treated the disregarded entity as a passthrough partner.

Ruling snapshot

  • Question: Did TEFRA apply when an owner and its disregarded entity filed a return for a partnership that did not legally exist?
  • Outcome: Advice given: TEFRA applied to determine that no partnership entity existed.
  • Key authorities: IRC §§ 761, 6231(a), 6233(b); Treas. Reg. § 301.6233-1(b); Rev. Rul. 2004-88.

Full text (IRS public release)

ID: CCA-911857-08 Number: 200913035
Release Date: 3/27/2009
Office: --------------
UILC: 6233.02-00

From: -------------------
Sent: Thu 9/11/2008 8:57 AM
To: ---------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
-------------------------
Subject: RE: DE is not TEFRA partnership

It is subject to TEFRA under section 6233(b) (even though no partnership exists) because it filed a partnership return and because the small partnership exception does not apply (assuming the LLC was listed as a partner). Under Rev. Rul. 2004-88 the DE is a "pass-thru" partner which makes TEFRA automatically apply.

You are right that there is no partnership under section 761and 6231(a) because you can't have a partnership with yourself. But Treas. Reg. 301.6233-1(b) makes TEFRA apply to determine that no partnership entity exists.

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