CCA 201017045: Contribution amount is a partnership item and resulting excise tax is affected

Number

201017045

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Affected Item

Topics

Procedure, penalties, and administration

Code sections

§ 6231

Ruling dated

March 24, 2010

Publicly released

April 30, 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.

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 advised that a contribution amount is a partnership item under the cited TEFRA regulations and case law. Without a TEFRA proceeding changing the amount, the IRS would be bound by the contribution shown on the partnership return and records for assessments against direct and indirect partners. The message further stated that the resulting excise tax is an affected item that cannot be determined before the TEFRA proceeding ends.

Ruling snapshot

Question: How should a partnership contribution amount and related excise tax be treated in a TEFRA proceeding?
Outcome: advice given
Key authorities: IRC § 6231; Treas. Reg. § 301.6231(a)(3)-1; American Boat Co. v. United States, 583 F.3d 471 (7th Cir. 2009); GAF v. Commissioner, 114 T.C. 519 (2000)

Full text (IRS public release)

ID: CCA_2010032415045637 Number: 201017045
Release Date: 4/30/2010
Office: ----------
UILC: 6231.05-00

From: -------------------
Sent: Wednesday, March 24, 2010 3:05:02 PM
To: ------------------
Cc: -----------
Subject: Question re Affected Item

The contribution amount is a partnership item under Treas. Reg. 301.6231(a)(3)-1(a)(4)(i) and (c)(2); American Boat Co. v. United States, 583 F.3d 471, 474 n.1, 480 (7th Cir. 2009); Nussdorf v. Commissioner, -- T.C. -- (2008). In the absence of a TEFRA proceeding to change the amount, we will be bound by the amount of the contribution reflected on the partnership return and books and records, with respect to any assessments against the direct and indirect partners. The adjustment to the amount of the contribution determined in the TEFRA proceeding affects the amount of excise tax that can we can assess against the direct and indirect partners. Thus, the excise tax is an affected item that cannot be determined prior to the conclusion of the TEFRA proceeding under GAF v. Commissioner, 114 T.C. 519 (2000).

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