Ezel / IRS Rulings / 201402007
Chief Counsel Advice 201402007 Released January 10, 2014 Advice

Adjusting partnership years and partner credit carryforwards

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This page covers one taxpayer's ruling from 2014, 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 2014
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 advice addresses TEFRA adjustments for partnership years that may be closed or open under the period-of-limitations rules. It states that each partnership year is a separate cause of action, so the IRS may adjust a partnership year regardless of how earlier or later years were reported. If a resulting credit is carried forward by the partners, the IRS may issue an FPAA for the carryforward year while that year remains open. The advice also addresses an FPAA for a partnership year in which the partnership improperly carried a credit forward at the partnership level.

Ruling snapshot

  • Question: May the IRS make TEFRA adjustments for a partnership year and issue FPAAs for open partner or partnership carryforward years?
  • Outcome: Advice given
  • Key authorities: IRC § 6229

Full text (IRS public release)

ID: CCA_2013080715501801 Third Party Communication: None

UILC: 6229.00-00 Date of Communication: Not Applicable

Number: 201402007
Release Date: 1/10/2014
From:
Sent: Wednesday, August 07, 2013 3:50:19 PM
To:
Cc:
Bcc:
Subject: RE: TEFRA Adjustments arising in closed years....

Each year is a separate cause of action and we are free to adjust that partnership year regardless of
how prior or later years were reported.

But the credit here would be carried forward by the partners, not the partnership. So we would have to
issue an FPAA for -------in order to prevent the partners from carrying the loss forward from ------ to their
later years. We can do so as long as the partners’ carryforward year is open. We did so in Kligfeld v.
Commissioner, 128 T.C. 192 and G-5 Holding v. Commissioner, 128 T.C. 186.

We would also have to issue an FPAA for the ------ partnership year if the partnership improperly carried
forward a credit at the partnership level.

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