CCA 200933030: Closing agreement can eliminate need for FPAAs

Plain-English summary

Chief Counsel Advice addressed a partnership case in which all partners resolved all issues through a Form 906 closing agreement. The advice stated that the Service could close the case as agreed without issuing notices of final partnership administrative adjustment. The closing agreement signed by all partners was treated as a settlement agreement that converted the disputed partnership items to non-partnership items and removed the partners from the TEFRA proceeding. Because no partner would be subject to an FPAA, the advice found no point in issuing one.

Ruling snapshot

• Question: Must the Service issue FPAAs when all partners have resolved all issues through a Form 906 closing agreement?
• Outcome: Advice given
• Key authorities: IRC §§ 6231(b)(1)(C) and 6226(d)(1)(A)

Full text (IRS public release)

ID: CCA_2009071308460737 Number: 200933030
Release Date: 8/14/2009
Office: --------------
UILC: 6231.13-00

From: -------------------
Sent: Monday, July 13, 2009 8:46:09 AM
To: --------------------------------
Cc: -----------
Subject: RE: Closing question

If all issues for all partners were resolved through a Form 906, you can just close the case agreed and not issue FPAAs. The closing agreement signed by all partners is a settlement agreement under section 6231(b)(1)(C) that converted the disputed partnership items to non-partnership items and removed all partners from the TEFRA proceeding. See, e.g, I.R.C. 6226(d)(1)(A). Since no partner would be subject to any FPAA you issue, there is no point in issuing an FPAA. In other words, this is just the same as if all partners had signed their own separate Forms 870-PT.