Ezel / IRS Rulings / 1129039
Chief Counsel Advice 1129039 Released July 22, 2011 Advice

CCA 1129039: TEFRA procedures apply despite later questions about partnership status

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This page covers one taxpayer's ruling from 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 resolved one taxpayer's situation on its specific facts, 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 considered amended partnership returns filed after three years and concluded that the TEFRA partnership procedures still applied. The advice stated that section 6233 makes the procedures applicable when a TEFRA partnership return is filed, even if it is later determined that no TEFRA partnership exists. It also stated that using a nominee, disregarded entity, or sham entity to hold a partnership interest prevents reliance on the small-partnership exception. If the relevant assessment periods remained open, the IRS could still issue FPAAs.

Ruling snapshot

  • Question: Whether TEFRA partnership procedures applied after amended returns identified ultimate owners instead of nominees.
  • Outcome: Advice given.
  • Key authorities: IRC § 6233; Rev. Rul. 2004-88.

Full text (IRS public release)

ID: CCA_2011070112201337 Number: 201129039
Release Date: 7/22/2011
Office: ----------
UILC: 6233.00-00

From: -------------------
Sent: Friday, July 01, 2011 12:20:27 PM
To: --------------------
Cc: ----------------------------------------------------------------------
Subject: RE: Amended TEFRA 1065 filed after 3 years

The adjustments are subject to the TEFRA partnership procedures for two reasons. Section 6233
mandates that, if a TEFRA partnership return is filed, then the TEFRA procedures apply even if it is
ultimately determined (through AAR procedures or otherwise) that no TEFRA partnership exists.
Secondly, if a partnership interest is held through a nominee, disregarded entity or sham entity, the small
partnership exception to the TEFRA procedures does not apply. Rev. Rul. 2004-88. The fact that
amended returns were filed showing the ultimate owners rather than their nominees does not change the
applicable procedure.

If the 1040 statutes are open we can still issue FPAA's. Of if the tax has already been paid, we don't
have to do anything.

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