Ezel / IRS Rulings / 1020015
Chief Counsel Advice 1020015 Released May 21, 2010 Advice

CCA 1020015: Counsel discussed assessment procedures for inconsistent partnership reporting

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This page covers one taxpayer's ruling from 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 resolved one taxpayer's situation on its specific facts, 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

In an internal Chief Counsel email concerning another TEFRA question, the sender addressed indirect partners holding an interest in one partnership through another partnership. The email states that the indirect partners may be assessed when their reporting of the lower-tier partnership items is inconsistent, subject to the required assessment procedure and the facts. If a bad-debt deduction is clearly identified on the upper-tier return as the same liability reported on the lower-tier return, disallowance may be a directly assessable computational adjustment under IRC § 6222. If that connection is not obvious from the return, the IRS may need to issue an affected-item notice or FPAA to the upper-tier partnership to make the partner-level factual determination.

Ruling snapshot

  • Question: How may the IRS assess partners when partnership returns report inconsistent treatment of the same item?
  • Outcome: Advice given
  • Key authorities: IRC § 6222

Full text (IRS public release)

ID: CCA_2010041613493737 Number: 201020015
Release Date: 5/21/2010
Office: ---------
UILC: 6222.03-00

From: --------------------
Sent: Friday, April 16, 2010 1:49:39 PM
To: --------------------
Cc: ------------
Subject: RE: Another TEFRA question ---------

As long as all assessments are consistent with the treatment by Y we can assess the indirect partners
holding an interest in Y through X, based on inconsistent reporting by them of Y's partnership items. The
required assessment procedure, however, may not be clear depending on your facts. Disallowing X's bad
debt deduction because it is inconsistent with Y's reporting may be a directly assessable computational
adjustment under section 6222 if the bad debt is clearly identified on the X return as the same liability
reported on the Y return as a valid continuing liability. If, on the face of the X return this association is not
obvious, we may have to issue an affected item notice of FPAA to X to make the partner-level factual
determination that the treatment is inconsistent with a reported Y partnership item.

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