IRS advised on who may sign Form 872-P for an entity tax matters partner

Plain-English summary

The IRS advised that when a tax matters partner is an entity, a person with state-law authority to bind that entity is the appropriate signer of Form 872-P. It applied that rule to an LLC and a corporation, concluding that Form 872-P is valid when signed by an individual with authority to bind the entity, even if the signature block is inaccurate.

Ruling snapshot

• Question: Who may sign Form 872-P when the tax matters partner is an LLC or corporation?
• Outcome: Advice given
• Key authorities: IRC §§ 6229 and 6231; IRM 4.31.2.6.4(2).

Full text (IRS public release)

ID: CCA_2010052809302154 Number: 201025065
Release Date: 6/25/2010
Office: --------------
UILC: 6229.02-00

From: --------------------------
Sent: Friday, May 28, 2010 9:30:26 AM
To: ----------------------------------------
Cc: --------------------
Subject: RE: URGENT - potential mistake

If a TMP is an entity, then the person with authority under State law to bind the entity is the appropriate person to sign the F872P. See August 21, 2009, Chief Counsel Notice, CC-2009-027, Question E2, citing IRM 4.31.2.6.4(2), Persons Empowered to Sign a Consent.

Thus, if the TMP for ------- was the LLC, then the F872P would be appropriate, as the signing individual had authority under State law to bind the LLC.

Your e-mail message suggests, though, that the LLC was the TMP from ------ onward, and that the TMP for partnership year ------- was the corporation. To the extent that the TMP for partnership year ------- was the corporation, then the F872P should be signed by an individual with authority under State law to bind the corporation.

You have indicated that the person who signed the F872P had authority under State law, at all relevant times, to bind the corporation. If the signing individual had authority under State law, at the time of signing the F872P, to bind the corporation, and the corporation was the TMP of the TEFRA partnership for the subject partnership year, then the F872P is valid. We are not aware of any authority for the proposition that an inaccuracy in the signature block would invalidate the F872P.