Ezel / IRS Rulings / 201005030

CCA 201005030: The IRS can settle a partnership's foreign withholding liability

Number
201005030
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Assessment of Partnership Items, Converted to Nonpartnership Items
Topics
Procedure, penalties, and administration
Code sections
§ 1446, § 6229
Ruling dated
December 30, 2009
Publicly released
February 5, 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 internal IRS Chief Counsel advice addresses how to resolve a partnership's liability for withholding under IRC § 1446. The IRS may enter into a settlement agreement with the partnership, signed by someone authorized under state law, and close the case. If the withholding adjustment creates tax consequences for individual partners, the issue must be included in the FPAA or resolved with the partners through settlement agreements. Under IRC § 6229(f), an agreement with the partners is complete if the withholding liability is the only partnership item being adjusted, and partial if other partnership items are also adjusted.

Ruling snapshot

  • Question: How may the IRS settle a partnership's § 1446 withholding liability and related partner consequences?
  • Outcome: Advice given.
  • Key authorities: IRC §§ 1446 and 6229(f).

Full text (IRS public release)

ID: CCA_2009123008484954 Number: 201005030
Release Date: 2/5/2010
Office: --------------
UILC: 6229.07-00

From: --------------------------
Sent: Wednesday, December 30, 2009 8:48:54 AM
To: ------------------------------------------
Cc:
Subject: RE: Foreign withholding issue

The Service can resolve the section 1446 withholding liability by entering into a settlement agreement with the partnership entity (signed by any person with authority under State law to bind the partnership entity). The Service may collect and process that case for closure. If there are no other partnership items to be resolved with the partnership entity, then the agreement with the entity is, for purposes of section 6229(f), a complete agreement.

If the adjustment to section 1446 withholding liability gives rise to tax consequences to the individual partners, then the section 1446 withholding liability needs to be included in the FPAA and/or the Service can resolve the issue with the partners through settlement agreements. For purposes of section 6229(f), if the section 1446 withholding liability is the only partnership item being adjusted, then agreements with the individual partners would be complete settlement agreement; otherwise, they would be partial.
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