Ezel / IRS Rulings / 200929013

CCA says a tier pass-through partner's bankruptcy does not convert partnership items

Number
200929013
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Items Cease to Be Partnership Items in Certain Cases
Topics
Procedure, penalties, and administration
Code sections
§ 6231, § 6110
Ruling dated
June 22, 2009
Publicly released
July 17, 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 Advice addresses whether partnership items converted after a tier pass-through partner entered bankruptcy. The memorandum concludes that the partnership items did not convert and that the bankruptcy of a tier pass-through partner does not convert the partnership items for indirect partners. It therefore states that the writer's original advice remains applicable.

Ruling snapshot

  • Question: Does the bankruptcy of a tier pass-through partner convert partnership items for indirect partners?
  • Outcome: Advice given, the memorandum says the partnership items did not convert.
  • Key authorities: IRC § 6231; Third Dividend Dardanos v. Commissioner, (9th Cir. 1996); IRC § 6110(k)(3).

Full text (IRS public release)

ID: CCA_2009062211550437 Number: 200929013
Release Date: 7/17/2009
Office: --------------
UILC: 6231.13-00

From: -------------------
Sent: Monday, June 22, 2009 11:55:05 AM
To: --------------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Subject: RE: Assessment AAR Question ---------

The partnership items did not convert. The bankruptcy of a tier pass-thru partner does not convert the partnership items for the indirect partners. Third Dividend Dardanos v. Commissioner, (9th Cir. 1996). So my original advice stands.

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