CCA 201109020: A foreign tax credit error from partnership income is an affected item

Plain-English summary

Chief Counsel advice addressed a partner's failure to properly compute a foreign tax credit derived from partnership income. It concluded that the error would be an affected item. The advice stated that, after the partnership proceeding, the Service would have one year to assess the underreported tax, probably through an affected-item notice of deficiency, unless the deficiency was purely computational from the face of the partner returns.

Ruling snapshot

• Question: How should an incorrectly computed foreign tax credit from partnership income be treated after a partnership proceeding?
• Outcome: Advice given.
• Key authorities: IRC § 6231.

Full text (IRS public release)

ID: CCA_2011020412155037 Number: 201109020
Release Date: 3/4/2011
Office: ----------
UILC: 6231.05-00

From: -------------------
Sent: Friday, February 04, 2011 12:15:57 PM
To: --------------------------------------------------------------------- Cc: ----------------------------------------------------------------------- Subject: RE: TEFRA Issues

The failure of partners to properly compute their foreign tax credit deriving from partnership income would be an affected item. Following the partnership proceeding we would one year to assess the under reported tax, probably through an affected item notice of deficiency unless the deficiency is purely computational from the face of the partner returns.