CCA 201042029: Return selection need not be resolved to determine a TEFRA adjustment

Plain-English summary

Chief Counsel Advice addressed whether an amended return or a superseding return should be used as the starting point for a TEFRA administrative adjustment request. It stated that the issue did not need to be resolved in the case. The IRS could use either return as starting numbers if it identified that choice, because the validity of the FPAA would not be affected. The required determination was the final income, deductions, and accounting method.

Ruling snapshot

• Question: Must the IRS resolve whether an amended or superseding return is the proper starting point for a TEFRA adjustment?
• Outcome: Advice given
• Key authorities: IRC § 6227

Full text (IRS public release)

ID: CCA_2010082314015837 Number: 201042029
Release Date: 10/22/2010
Office: ----------
UILC: 6227.00-00

From: -------------------
Sent: Monday, August 23, 2010 2:02:02 PM
To: -------------------
Cc: ----------------------------------------
Subject: RE: Statutes - amended return or replacement return - impact on TEFRA AAR

My answer remains the same. It is not necessary to resolve the issue in this case. Just determine the correct accounting method and income/deductions. You can use the first return as a starting point just as long as you acknowledge those are the starting numbers and that you are using those instead of the superseding return. Using either return as the starting point will not affect the validity of our FPAA. All that is required is that we determine the end result of the income, deductions and accounting method.