CCA 200933033: General partner qualifies as tax matters partner

Plain-English summary

Chief Counsel Advice addressed who qualified as a partnership's tax matters partner under the largest profits interest rule. It concluded that the general partner's zero interest was the largest general partner interest because zero was the largest such interest, and the partner had a capital-appreciation interest sufficient to constitute a profits interest greater than zero. The advice said the regulatory limitation for a partner deemed to have no profits interest did not apply. It also stated that a tax matters partner was unnecessary because a generic tax matters partner FPAA was sufficient.

Ruling snapshot

• Question: Did the general partner qualify as the tax matters partner under the largest profits interest rule?
• Outcome: Advice given
• Key authorities: Treas. Reg. § 301.6231(a)(7)-1(o)(2); IRC § 6226

Full text (IRS public release)

ID: CCA_2009071312265937 Number: 200933033
Release Date: 8/14/2009
Office: --------------
UILC: 6231.07-00

From: -------------------
Sent: Monday, July 13, 2009 12:27:00 PM
To: ----------------------------
Cc: -----------
Subject: RE: Tax Matters Partner

The general partner is the TMP under the largest profits interest rule because zero is the largest general partner interest. He has an interest in capital appreciation in any event which would be sufficient to constitute a profits interest of more than zero. The limitation under Treas. Reg. 301.6231(a)(7)-1(o)(2) does not apply because that limitation only applies when a partner is "deemed to have no profits interest" because of death, insolvency, conversion, incompetency or liquidation.

We don't need a TMP in any event since a generic TMP FPAA is sufficient. ---------------------------------------
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