Ezel / IRS Rulings / 200947040

CCA 200947040: Partnership-level treatment of penalties and defenses

Number
200947040
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Tax Treatment Determined At Partnership Level
Topics
Procedure, penalties, and administration
Code sections
§ 6221, § 6110
Publicly released
November 20, 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

This Chief Counsel advice states that penalties and related defenses are affected items because they are not partnership items. It explains that penalties related to partnership items are nevertheless determined at the partnership level, except for partner-level defenses such as reasonable cause and good faith asserted by limited partners. The partnership's reasonable-cause defense is determined at the partnership level based on the reasonable cause of its manager or general partner acting in a representative capacity.

Ruling snapshot

  • Question: At what level are penalties and reasonable-cause defenses determined in a partnership proceeding?
  • Outcome: Advice given
  • Key authorities: IRC § 6221

Full text (IRS public release)

ID: CCA_2009101308552437 Number: 200947040
Release Date: 11/20/2009
Office: ----------
UILC: 6221.00-00

From: -------------------
Sent: Tuesday, October 13, 2009 8:55:33 AM
To: -------------------
Cc: -----------
Subject: RE: question

Both the penalties and any defenses are affected items since neither meet the definition of a partnership item (i.e., an item under subtitle A). Penalties are under subtitle F. Penalties related to partnership items are neverthess determined at the partnership level, except for partner level defenses such as the reasonable cause/good faith of the limited partners. The partnership's reasonable cause is determined at the partnership level based on the reasonable cause of its manager/general partner who engaged in the partnership transactions in a representative capacity.

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