Assessment period for partnership-loss carryforward adjustments

Plain-English summary

The Chief Counsel advice states that a carryforward amount from a partnership adjustment is a computational affected item. It concludes that when the Tax Matters Partner signs Form 872-P, the partner extends the minimum assessment period for tax attributable to a disallowed partnership loss. The extension applies regardless of which partner return claimed the loss and includes carryforward years, because the form does not limit the extension to the partnership year in which the loss arose.

Ruling snapshot

• Question: Does a Form 872-P signed by the Tax Matters Partner extend assessment periods for partner returns claiming a carried-forward partnership loss?
• Outcome: Advice given
• Key authorities: IRC § 6229; Olsen v. U.S., 172 F.3d 1311 (Fed. Cir. 1999); Cummings v. Commissioner, T.C. Memo 1996-282; Bob Hambric Chevrolet v. U.S., 849 F. Supp. 500 (WD Tex. 1994)

Full text (IRS public release)

ID: CCA_2013112209201201 Third Party Communication: None

UILC: 6229.02-00 Date of Communication: Not Applicable

Number: 201402011
Release Date: 1/10/2014
From:
Sent: Friday, November 22, 2013 9:20:13 AM
To:
Cc:
Bcc:
Subject: RE: TEFRA question

The carryforward amount of any adjustment is a computational
affected item under Olsen v. U.S., 172 F.3d 1311 (Fed. Cir. 1999);
Cummings v. Commissioner, T.C. Memo 1996-282; Bob Hambric
Chevrolet v. U.S., 849 F. Supp. 500 (WD Tex. 1994).

When the TMP signs a Form 872-P, he extends the minimum period for
assessment any tax attributable to a disallowed partnership loss,
regardless of which return a partner claimed that loss on. So when he
extends the period for assessing tax “attributable to” a partnership
loss for partnership year 1, he is extending the assessment period for
all partner returns claiming that loss including carryforward years.
There is nothing in the Form 872-P that limits the assessment to a
partner return for year 1.