Ezel / IRS Rulings / 201102059

CCA 201102059: Partnership dissolution does not end TEFRA procedures

Number
201102059
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Extension by Agreement
Topics
Procedure, penalties, and administration
Code sections
§ 6229
Ruling dated
November 29, 2010
Publicly released
January 14, 2011
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 2011, 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 2011
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

Chief Counsel advice addresses the continuing application of TEFRA partnership procedures after a partnership dissolves. It states that dissolution does not end the procedures, which are analogous to a class action audit of the partners. The advice also states that state-law authorized officials, rather than the tier partner’s TMP, must sign for the tier partner, subject to the operating agreement and state law.

Ruling snapshot

  • Question: Do TEFRA procedures continue after dissolution, and who may sign for a tier partner?
  • Outcome: advice given
  • Key authorities: IRC § 6229; Chef’s Choice v. Commissioner, 95 T.C. 388 (1990); Notice of Frequently Asked TEFRA Questions

Full text (IRS public release)

ID: CCA_2010112916235137 Number: 201102059
Release Date: 1/14/2011
Office: ----------
UILC: 6229.02-00

From: -------------------
Sent: Monday, November 29, 2010 4:23:54 PM
To: ----------------------
Cc: -------------------------------------
Subject: RE: TEFRA Statute Extension and TMP

You are correct on issue #1 that the dissolution of the partnership does not affect the continuing application of the TEFRA partnership procedures which are analogous to a class action audit of the partners in which the partnership itself is not a party. See Chef's Choice v. Commissioner, 95 T.C. 388 (1990) for a discussion of this point.

On issue # 2 you need state law authorized officials to sign for the tier partner - not its own TMP. Your facts do not state whether the ultimate members (2 trusts) were authorized under state law to sign documents on behalf of the LLC general partner - LLC's can be member managed or manager managed depending on state law and the operating agreement. Whoever is authorized to act for the LLC would sign for it, signing in turn as general partner of the LP which is the TMP of the TEFRA partnership. This is covered by the Notice of Frequently Asked TEFRA questions.

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