CCA 200920047: Current notice required Munro computations but excluded a partnership basis adjustment

Plain-English summary

Chief Counsel reviewed computations for a statutory notice of deficiency involving an open partnership linkage. The taxpayer’s return was not oversheltered, and the linkage remained open, so Counsel said Munro computations were required to the extent the linkage affected the notice. Those computations likely would not change the deficiency if the taxpayer’s tax bracket remained the same. A basis adjustment was an affected item and had to be excluded from the current notice. Counsel expected that adjustment to be handled through a second affected-item notice after the partnership proceeding ended.

Ruling snapshot

• Question: Did the current notice require Munro computations, and should it include the partnership-related basis adjustment?
• Outcome: Advice given: perform the Munro computations, but reserve the basis adjustment for a later affected-item notice.
• Key authorities: IRC § 6221; GAF v. Commissioner, 114 T.C. 519 (2000).

Full text (IRS public release)

ID: CCA_2009040610250137 Number: 200920047
Release Date: 5/15/2009
Office: --------------
UILC: 6221.00-00

From: -------------------
Sent: Monday, April 06, 2009 10:25:02 AM
To: -------------------------------------------------------------------------------------- Cc: ----------------------------------------------------- Subject: RE: Munro comps; SND review

Munro comps are required for all non-oversheltered returns with open linkages. Since the taxpayer return is (1) not oversheltered, and (2) there is an open linkage, Munro comps must be done for this stat notice, insofar as the open linkage is affected. It is likely that the Munro comp will not change the amount of the deficiency under these facts if the taxpayer's tax bracket does not change. The basis adjustment must be excluded from the stat notice as an affected item that will likely be adjusted through a second "affected item" notice of deficiency issued after the partnership proceeding is complete. See GAF v. Commissioner 114 T.C. 519 (2000).