CCA 200928031: Computational correction may be assessed directly, but its penalty requires a deficiency notice

Plain-English summary

Chief Counsel advised that the IRS could directly assess an inconsistently reported partnership amount when the correction was purely computational. The example was substituting the amount shown on Schedule K-1 for the amount the taxpayer reported. A related penalty could not be directly assessed through the same route and would require a notice of deficiency.

Ruling snapshot

• Question: May the IRS directly assess an inconsistent partnership amount and the related penalty?
• Outcome: Advice given that the computational adjustment may be directly assessed, but the penalty requires a deficiency notice
• Key authorities: IRC § 6222

Full text (IRS public release)

ID: CCA_2009052710510537 Number: 200928031

Release Date: 7/10/2009

Office: -------------

UILC: 6222.03-00

From: --------------------

Sent: Wednesday, May 27, 2009 10:51:07 AM

To: -------------------

Cc: --------------------------------------

Subject: RE: IRC 6222

I agree that we can make a direct assessment if the assessment of the inconsistently reported amount is purely computational, i.e., substituting the K-1 amount for the reported amount. We would need to issue a notice of deficiency, however, for the related penalty.