Ezel / IRS Rulings / 1326018
Chief Counsel Advice 1326018 Released June 28, 2013 Advice

CCA 1326018: A paid manager is a tax matters partner only if the person is a partner for federal tax purposes

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This page covers one taxpayer's ruling from 2013, 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 2013
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

The Chief Counsel's Office addressed whether a paid manager described as a partner under state law could be the federal tax matters partner. It said the person is not a partner for federal tax purposes unless the person has a capital or profits interest under the standards from the Supreme Court's Culbertson and Tower cases. A zero amount on Schedule K-1 may not resolve the question because the person's interest could include future profits or capital appreciation. If the listed general partner is a federal tax partner and the only general partner, that person is the tax matters partner under the default rule in section 6231(a)(7)(B).

Ruling snapshot

  • Question: When is a manager called a partner under state law the federal tax matters partner?
  • Outcome: Advice given
  • Key authorities: IRC § 6231(a)(7)(B); Culbertson and Tower cases

Full text (IRS public release)

ID: CCA_2013061009503801 Third Party Communication: None

UILC: 6231.07-00 Date of Communication: Not Applicable

Number: 201326018
Release Date: 6/28/2013
From:
Sent: Monday, June 10, 2013 9:50:38 AM
To:
Cc:
Bcc:
Subject: RE: Quick TEFRA question

Some states call a paid manager a “partner” . But such a person is not a partner for
federal tax purposes unless they have a capital or profits interest under the Supreme
Court standard in the Culbertson and Tower cases. A K-1 amount of zero may not be
determinative since profits include future profits and the person may have an interest in
capital appreciation. But if the listed general partner is, in fact, a partner under this
standard and is the only general partner, it would be the TMP under the default rule of
section 6231(a)(7)(B).

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