CCA 201032039: Partnership items are subject to partner-level assessment periods, not a separate partnership statute

Plain-English summary

Chief Counsel Advice explains that there is no separate partnership statute of limitations for the issue under review. Section 6229(a) provides a minimum period during which a partner's section 6501 assessment period will not expire for partnership items, and the tax matters partner or individual partners can extend the applicable periods using the identified consent forms. The advice also states that partnership items used to compute a partner's basis in an affected-item proceeding bind both the partner and the government under section 705.

Ruling snapshot

• Question: How do assessment-period extensions and partnership items affect an affected-item proceeding involving a partner's basis?
• Outcome: Advice given
• Key authorities: IRC §§ 6221, 6229(a), 6501, and 705.

Full text (IRS public release)

ID: CCA_2010070209114337 Number: 201032039
Release Date: 8/13/2010
Office: ----------
UILC: 6221.00-00

From: -------------------
Sent: Friday, July 02, 2010 9:11:46 AM
To: -----------------
Cc: -----------------------------------
Subject: RE: ------ - At Risk Basis Adjustment for a Partner in a TEFRA Partnership

There is no partnership statute of limitations. Section 6229(a) merely provides a minimum period during which no partner's section 6501 period will expire with respect to partnership items. The TMP can extend every partner's section 6501 period for assessing partnership items using a Form 872-P, or the partners can extend the statute for themselves using the old Form 872-i or the new Form 872.

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----------------------------------------------------------------------------------------------------------------- In the affected item proceeding, both the partner and the government will be bound by those partnership items under section 705 that the partner must use in computing his basis as reflected on the partnership return, books and records. See Roberts v. Commissioner, 94 T.C. 853, 860 (1990)(bound by partnership books and records in affected item proceeding for at risk when no prior partnership proceeding) ; Gustin v. Commissioner T.C. memo (basis limitation affected item stat notice may be issued without prior partnership proceeding) and University Heights v. Commissioner, 97 T.C. 278 (1991)(listing partnership items that go into computation of partner's outside basis).