Ezel / IRS Rulings / 201016058

CCA 201016058: COD income under the insolvency exception requires a partner-level determination

Number
201016058
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Coordination with Deficiency Proceedings
Topics
Procedure, penalties, and administration
Code sections
§ 108, § 6229, § 6501
Ruling dated
March 12, 2010
Publicly released
April 23, 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

Chief Counsel Advice states that the Service must issue a notice of deficiency to assess cancellation-of-debt income when the insolvency exception in section 108 requires a partner-level determination. If sufficient time remains under the statute, the taxpayer may go to Appeals before the notice is issued. The notice must be issued within the partner's section 6501 limitations period, as extended by section 6229.

Ruling snapshot

  • Question: How should the Service assess cancellation-of-debt income when the section 108 insolvency exception must be determined at the partner level?
  • Outcome: Advice given
  • Key authorities: IRC §§ 108, 6229, and 6501

Full text (IRS public release)

ID: CCA_2010031208464137 Number: 201016058
Release Date: 4/23/2010
Office: ----------
UILC: 6230.01-00

From: -------------------
Sent: Friday, March 12, 2010 8:46:44 AM
To: ---------------------
Cc: -----------
Subject: RE: -------------

We would have to issue a notice of deficiency to assess the COD income because the insolvency exception of section 108 is a required partner level determination. If there is enough time left on the statute the taxpayer can go to appeals first before we issue the notice. The notice has to be issued within the partner's section 6501 period as may be extended by section 6229.

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