Ezel / IRS Rulings / 201035017

CCA said indirect partners must sign the partner-level part of Form 870-LT

Number
201035017
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Settlement Agreement
Topics
Procedure, penalties, and administration
Code sections
§ 6224, § 6110
Ruling dated
August 9, 2010
Publicly released
September 3, 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.

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 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

The Office of Chief Counsel advised that, under IRC § 6224(c)(1), a settlement by a pass-through partner binds indirect partners as to partnership items. The advice distinguishes partner-level affected items in Part II of Form 870-LT, stating that a pass-through partner cannot bind indirect partners for those items. The indirect partners therefore should sign Part II themselves.

Ruling snapshot

  • Question: Who must sign the partner-level affected-item portion of Form 870-LT when a pass-through partner settles partnership items?
  • Outcome: Advice given
  • Key authorities: IRC § 6224(c)(1); Form 870-LT; IRC § 6110(k)(3) not-precedent notice

Full text (IRS public release)

ID: CCA_2010080908461637 Number: 201035017
Release Date: 9/3/2010
Office: ----------
UILC: 6224.01-01

From: -------------------
Sent: Monday, August 09, 2010 8:46:21 AM
To: --------------------------------
Cc: -----------
Subject: RE:

Under section 6224(c)(1)(last sentence), a settlement by a pass-thru partner binds indirect partners to the settlement of partnership items. The problem is that the Form 870-LT (unlike the PT version of the form) has a second part separately executed with respect to affected items. A pas-thru partner cannot bind indirect partners as to partner-level items on Part II of this form.

So you are correct that the indirect partners should sign this form since the trust cannot sign Part II for them.

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