CCA 200923046: FPAA binds partners who separately extended their assessment periods

Plain-English summary

Chief Counsel advised that the IRS could issue a final partnership administrative adjustment that would bind direct and indirect partners whose assessment periods remained open through Forms 872-I. The partnership itself has no assessment period. Instead, section 6229 establishes a minimum expiration date for each partner's section 6501 period for tax attributable to partnership items. The tax matters partner may extend that minimum period for all partners, or each partner may extend the period individually. Form 872-I contains language referring to partnership items to meet the separate requirement in section 6229(b)(3).

Ruling snapshot

• Question: Would an FPAA bind partners who kept their own assessment periods open with Forms 872-I?
• Outcome: Advice given
• Key authorities: IRC §§ 6229(b) and 6501; Rhone-Poulenc v. Commissioner, 114 T.C. 533 (2000); Ginsburg v. Commissioner, 127 T.C. 75 (2006)

Full text (IRS public release)

ID: CCA_2009050614420837 Number: 200923046
Release Date: 6/5/2009
Office: --------------
UILC: 6229.02-00

From: -------------------
Sent: Wednesday, May 06, 2009 2:42:10 PM
To: ---------------------
Cc: -----------
Subject: RE: partner statutes and FPAA

We can issue an FPAA and it will be binding on all taxable direct and indirect partners who have open statutes using the Form 872-i. See Rhone-Poulenc v. Commissioner, 114 T.C. 533 (2000). The partnership has no statute. Section 6229 just operates to extend to a minimum expiration date each direct and indirect partner's section 6501 statute for tax attributable to partnership items. Id. The TMP can extend this minimum period for all partners under section 6229(b)(1)(B) as their agent. Alternatively, as apparently occurred here, each partner can extend the statute for himself as provided by section 6229(b)(1)(A). The Form 872-i has special language included to comply with the separate requirements of section 6229(b)(3) that partnership items be referenced in the extension agreement. See Ginsburg v. Commissioner, 127 T.C. 75 (2006).