CCA 200931057: Form 870-P settlement binds the parties to the correct treatment

Plain-English summary

Chief Counsel advised that if a taxpayer agreed to the correct amount of partnership items under a fair reading of Form 870-P, with a meeting of the minds on the correct treatment, the taxpayer and the government are bound by that treatment. The advice explains that IRC § 6224(c)(1) concerns the correct determination of the final amount of a partnership item, rather than whether the item as originally reported was incorrectly reflected.

Ruling snapshot

• Question: When does a Form 870-P settlement bind the taxpayer and the government regarding partnership items?
• Outcome: Advice given
• Key authorities: IRC § 6224(c); Form 870-P

Full text (IRS public release)

ID: CCA_2009063012110937 Number: 200931057
Release Date: 7/31/2009
Office: -------------
UILC: 6224.01-01

From: --------------------
Sent: Tuesday, June 30, 2009 12:11:10 PM
To: -----------------
Cc: ------------
Subject: RE: 1065 question

If the taxpayer agreed to the correct amount of the partnership items under a fair reading of the Form
870-P, i.e., there was a meeting of the minds as to the correct treatment, then under section 6224(c) the
taxpayer and the government are bound to that correct treatment. Section 6224(c)(1) speaks in terms of
the correct "determination" of the final amount of a partnership item. Not whether the beginning point
(item as reported) may have been incorrectly reflected.