Ezel / IRS Rulings / 201004031

Federal law determines whether a person is a partner

Number
201004031
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Partner
Topics
Partnerships
Code sections
§ 761
Ruling dated
December 29, 2009
Publicly released
January 29, 2010
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 2010, 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 2010
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 whether a person is a partner is an issue of federal law under § 761. It applies the Supreme Court standards from Culbertson and Tower. A person who contributes services to a trade or business for profit is a partner, and the fact that the person will not receive a share of profits until a later year does not matter if the interest vested through the contribution.

Ruling snapshot

  • Question: When is a person a partner for federal tax purposes?
  • Outcome: Advice given.
  • Key authorities: IRC § 761; Culbertson and Tower.

Full text (IRS public release)

ID: CCA_2009122909432237 Number: 201004031
Release Date: 1/29/2010
Office: ----------
UILC: 761.02-00

From: -------------------
Sent: Tuesday, December 29, 2009 9:43:29 AM
To: -----------------
Cc:
Subject: RE: TEFRA question ---------

The issue of whether a person is a "partner" is purely an issue of Federal Law interpreting section 761 under the Supreme Court standard enunciated in Culbertson and Tower. If a person contributed services in a trade or business for profit, he is a partner. The fact that he may not receive a share of profits until a later year should not matter as long as his interest has vested by virtue of his contribution.

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