CCA 200922048: A checked TEFRA box might not justify reliance on the partnership return
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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.
Plain-English summary
Chief Counsel considered whether the IRS could rely on a partnership return indicating that TEFRA applied. The Form 1065 instructions stated that checking the box did not itself make an election. Section 6231(g) allowed reliance on return information only when the resulting determination was reasonable. Because the taxpayers refused to provide proof of an election and the instructions disclaimed an election by checkbox, the email cautioned that reliance on the return might not be reasonable. Other portions of the discussion were redacted.
Ruling snapshot
- Question: Could the IRS reasonably treat a checked Form 1065 TEFRA box as sufficient when proof of an election was unavailable?
- Outcome: Advice given: reliance might not be reasonable under the described circumstances.
- Key authorities: IRC § 6231(g); Form 1065 instructions described in the email.
Full text (IRS public release)
ID: CCA-119323-09 Number: 200922048
Release Date: 5/29/2009
Office: --------------
UILC: 6231.01-01
From: -------------------
Sent: Wed 11/5/2008 2:18 PM
To: ----------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
-------------------------
Subject: RE: TEFRA question
--------------------------------------------------------------------------------------------. The instructions to the Form 1065 state that checking the box that the entity is subject to TEFRA does not constitute an election. But section 6231(g) states that we can rely on the return to determine whether TEFRA applies, but only if such determination is reasonable. Since the instructions say that checking the box is not an election, and since taxpayers have now refused to provide proof as to whether they filed such an election on not, it might not be reasonable to rely on the return. -------------------------------------------------------------------------------
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