CCA 201005031: An FPAA may be issued for a closed year when it affects assessments in later open years

Plain-English summary

This internal IRS Chief Counsel advice considers whether an FPAA can be issued for a partnership year that is closed for assessment. It says that Kligfeld and G-5 Holdings support issuing an FPAA for the closed year when the result is an assessment against partners for later open years. The advice identifies those later-year effects as an NOL carryforward to an open year and the sale of distributed stock with carryover basis in a later open year. It also says that no case supports the contrary proposition stated in the request.

Ruling snapshot

• Question: Can an FPAA be issued for a closed partnership year when it affects assessments in later open years?
• Outcome: Advice given.
• Key authorities: IRC § 6229; Kligfeld; G-5 Holdings.

Full text (IRS public release)

ID: CCA_2009123010441337 Number: 201005031
Release Date: 2/5/2010
Office: ----------
UILC: 6229.00-00

From: -------------------
Sent: Wednesday, December 30, 2009 10:44:16 AM
To: ---------------------
Cc: -----------
Subject: RE: Case name?

There is no case standing for that proposition.

But Kligfeld and G-5 Holdings stand for the proposition that we can issue an FPAA for year 1 (closed)
because it results in the assessment of the partners in their open

Years 2 and 3 (NOL carryforward to an open year and sale of distributed stock with carryover basis in
later open year).