Ezel / IRS Rulings / 201005040

CCA 201005040: A partner's inconsistency notice or election can require TEFRA procedures and an FPAA

Number
201005040
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Effect of Failure to Notify
Topics
Procedure, penalties, and administration
Code sections
§ 6222, § 6230
Ruling dated
January 11, 2010
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 the effect of a partner's response to an inconsistency involving partnership items. It says that if the partner files a statement identifying the inconsistency or makes the election under Treas. Reg. § 301.6222(b)-3, TEFRA procedures apply and an FPAA is necessary. Otherwise, no FPAA is necessary. A notice of deficiency is required only when a partner-level determination is needed or partnership items have become nonpartnership items through a mechanism other than settlement. The advice also says the Service should use TEFRA procedures rather than CP 2000 in the statement or election circumstances.

Ruling snapshot

  • Question: When must the Service use TEFRA procedures, issue an FPAA, or issue a notice of deficiency for an inconsistent partnership item?
  • Outcome: Advice given.
  • Key authorities: IRC §§ 6222(c) and 6230(a)(2)(A); Treas. Reg. §§ 301.6222(b)-1, 301.6222(b)-2, and 301.6222(b)-3.

Full text (IRS public release)

ID: CCA_2010011108472954 Number: 201005040
Release Date: 2/5/2010
Office: --------------
UILC: 6222.03-00

From: --------------------------
Sent: Monday, January 11, 2010 8:47:31 AM
To: ------------------------------------------
Cc:
Subject: RE: BMF Document Matching Flow Through Impact

  1. No. See March 29, 2005 Chief Counsel Advisory, 2005 WL 1060955.

  2. Generally, no. If the partner has, pursuant to Treas. Reg. 301.6222(b)-1, filed a statement identifying
    the inconsistency, or if the partner makes a Treas. Reg. 301.6222(b)-3 election, then TEFRA procedures apply and an FPAA is necessary. Otherwise, no FPAA is necessary. I.R.C. 6222(c); Treas. Reg. 301.6222(b)-2.

A notice of deficiency is required only if a partner-level determination is necessary or if the partnership items have converted to nonpartnership items through a mechanism other than settlement. I.R.C. 6230(a)(2)(A).

  1. If the partner has filed a statement identifying the inconsistency or made a Treas. Reg. 301.6222(b)-3
    election, then the Service should not employ the CP 2000, but instead TEFRA procedures, and must consider whether to pursue issuing an FPAA. I.R.C. 6222(c); Treas. Reg. 301.6222(b)-2.

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