An FPAA is needed to preserve assessment authority over amended partnership items

Plain-English summary

Counsel advised that the IRS should issue an FPAA. An amended partnership return is a nullity unless it complies with section 6227, and without a valid administrative adjustment request the government and taxpayers remain bound by the original reporting. Even a valid request does not permit assessment if a partner objects to an assessment based on it. Counsel therefore concluded that an FPAA based on the original partnership return was the only way to protect the IRS's ability to assess.

Ruling snapshot

• Question: How can the IRS preserve its ability to assess when amended partnership returns report adjusted items?
• Outcome: Advice given
• Key authorities: IRC §§ 6222, 6227, and 6230; Roberts v. Commissioner, 94 T.C. at 860

Full text (IRS public release)

ID: CCA_2009091108533037 Number: 200945050
Release Date: 11/6/2009
Office: ----------
UILC: 6227.00-00

From: -------------------
Sent: Friday, September 11, 2009 8:53:40 AM
To: -------------------
Cc: -----------
Subject: RE:

An FPAA should be issued. An amended partnership return is a nullity unless it complies with section 6227, Request for Administrative Adjustment. In the absence of a valid AAR, both the government and the taxpayers are bound by the original reporting. See I.R.C. 6222 and Roberts v. Commissioner, 94 T.C at 860. Even a valid AAR does not allow us to assess if a partner object to assessment based on the AAR. See I.R.C. 6227(c)(1)(B) and 6230(b)(2). So the only way to protect our ability to assess is to issue an FPAA based on the original partnership return.