TEFRA partial-agreement status depends on the partnership year

Plain-English summary

Chief Counsel advice explained that whether an agreement is partial must be determined separately for each partnership year. If an agreement resolves all partnership items for a year, it is not partial for that year and the one-year minimum period under section 6229(f) runs from the signing date. For a future year with unresolved partnership items, the agreement is partial and the ordinary TEFRA statute applies to both settled and unsettled items. The advice also states that a closing agreement for a particular taxpayer does not require Form 870-PT.

Ruling snapshot

• Question: How should partial-agreement status and the section 6229(f) period be determined for different partnership years?
• Outcome: Advice given
• Key authorities: IRC § 6229; Form 870-PT

Full text (IRS public release)

ID: CCA_2012110914082037 Number: 201302038
Release Date: 1/11/2013
Office: ---------
UILC: 6229.00-00

From: --------------------
Sent: Friday, November 09, 2012 2:08:45 PM
To: ---------------------
Cc: --------------------------------------
Subject: RE: Form 870-PT Language

You determine "partial agreement" status on a year by year basis.

If a TEFRA agreement resolves all partnership items for a partnership year, it is not a partial agreement for that year and the one year minimum period under section 6229(f) will run one year from the date the agreement is signed.

For a future year where not all partnership items are being resolved, you have a partial agreement. In that case, the normal TEFRA statute under section 6229 applies to both the settled and unsettled items for that year. I.R.C. 6229(f)(2).

You could specify that the agreement constitutes a partial settlement for section 6229(f)(2) purposes for future years but constitutes a non-partial agreement as to partnership years 1, 2 and 3.

If you resolve this in a closing agreement for a particular taxpayer, you don't need a Form 870-PT.