CCA 201014066: IRS discusses contacting an LLC manager during an examination

Plain-English summary

Chief Counsel advice addresses whether a revenue agent could contact a person identified as an LLC manager during an examination. It explains that IRC § 6103 generally protects return information, but permits disclosure of a partnership return to a person who was a partnership member during the relevant tax period, subject to the federal tax administration limitation. Because the LLC had elected partnership status, the advice concludes that a redacted individual should be treated as a partner for this purpose. Whether that individual validly appointed another person as the LLC's manager was not determinative of whether the revenue agent could make contact.

Ruling snapshot

• Question: Could a revenue agent contact a redacted individual in connection with an LLC examination after the LLC elected partnership status?
• Outcome: Advice given
• Key authorities: IRC §§ 6103(b)(2), 6103(e)(1)(C), and 6103(e)(7)

Full text (IRS public release)

ID: CCA-2191529-10 Number: 201014066
Release Date: 4/9/2010
Office: --------------
UILC: 6103.05-03

From: ----------------
Sent: Fri 2/19/2010 3:22 PM
To: -----------------------
Cc: ---------------------
Subject: RE: Authority to Contact "Manager" of LLC

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I.R.C. § 6103 requires the IRS to maintain the confidentiality of return information unless a provision of Title 26 provides otherwise. Return information is information received, acquired, or generated by the IRS in connection with the determination of a taxpayer’s tax liability (see I.R.C. § 6103(b)(2)). An RA’s communication with ---- ------------ in the course of an examination would relate to the determination of -----------------------------tax liability, and would violate § 6103 unless a provision of Title 26 provides otherwise.

Section 6103(e)(1)(C) allows the IRS to disclose the return of a partnership to any person who was a member of the partnership during the tax period in question and return information may be disclosed to a member of the partnership so long as the disclosure does not impede federal tax administration. I.R.C. § 6103(e)(7).

Here, ---------------------elected to be classified as a partnership for federal income tax purposes for the tax period at issue. Because ---------------------elected partnership status, ---- ------------ should be considered a partner of ---------------------and § 6103(e)(1)(C) authorizes the disclosure of --------------------’s return to ------------- and § 6103(e)(7) authorizes the disclosure of --------------------’s return information as the disclosure would not impede federal tax administration. Therefore whether ------------- executed a valid resolution to appoint ---- ------------ the manager of ---------------------is not determinative of whether the revenue agent may contact ---- ------------ in connection with -----------------------examination.

Please let me know if you have any questions.

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