IRS advised on Form 872-P signatures by corporate and LLC tax matters partners

Plain-English summary

The IRS advised that a new Form 872-P could be obtained for open years when a corporation was the tax matters partner, with an individual signing under state-law authority as the corporation’s CFO. It stated that when an LLC was the tax matters partner, the individual should sign based on authority as the LLC’s managing member. It also advised that an inaccurate signature block does not necessarily invalidate Form 872-P if the signer had state-law authority to bind the corporate tax matters partner.

Ruling snapshot

• Question: When are new Form 872-P agreements valid, and what authority should an individual use when signing for a corporate or LLC tax matters partner?
• Outcome: Advice given
• Key authorities: IRC §§ 6229 and 6231.

Full text (IRS public release)

ID: CCA_2010052813154254 Number: 201025066
Release Date: 6/25/2010
Office: --------------
UILC: 6229.02-00

From: --------------------------
Sent: Friday, May 28, 2010 1:15:43 PM
To: ------------------
Cc: ------------------------------------------
Subject: RE: URGENT - potential mistake ---------

(1) If they are barred, then we cannot secure new F872P. If they are open, and the TMP for those years is the corporation, then the Service should try to obtain new F872P with signature blocks providing that the corporation is the TMP and that the individual is signing given his authority under State law to do so as the CFO of the TMP corporation.

(2) No. It is my understanding that the TMP is the LLC. For partnership years in which the LLC is the TMP, then the individual signing would sign based on his authority as a managing member of the LLC, not based on his authority as CFO of the corporation.

(3) No. Again, 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. The Service should look for evidence that at the time of signing, the individual had authority under state law to bind the TMP corporation. We are not aware of any authority for the proposition that an inaccuracy in the signature block would invalidate the F872P.