Ezel / IRS Rulings / 201411035

Married owners presumed to form a partnership

Number
201411035
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Partner
Topics
Partnerships
Code sections
§ 761
Ruling dated
April 12, 2013
Publicly released
March 14, 2014
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 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 is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, 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 advised that an entity owned by a husband and wife is presumed to be a partnership unless they elect to treat it as disregarded. Additional facts suggesting a sham would be needed to disregard one spouse as a partner. Each spouse should report the appropriate share of net self-employment earnings, subject to adjustments.

Ruling snapshot

  • Question: How should an entity owned by a husband and wife be classified for federal tax purposes?
  • Outcome: Advice given, partnership presumed absent a disregarded-entity election or facts showing a sham
  • Key authorities: IRC § 761(a) and (f); CCA 200816030

Full text (IRS public release)

ID: CCA-412308-13
UILC: 761.02-00

Number: 201411035
Release Date: 3/14/2014
From: ----------------
Sent: Friday, April 12, 2013 3:08 PM
To: --------------------
Cc: -----------------------
Bcc:
Subject: RE: partnership questions -- --------------------------------

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When an entity is owned by a husband and wife the presumption is that the entity is a partnership, unless they elect for the entity to be disregarded. See IRC § 761(a) & (f). There would have to be additional facts suggesting a sham for us to disregard the wife as a partner. Each spouse should have reported his/her share of net earnings from self-employment, with appropriate adjustments. See, e.g., CCA 200816030. If you need assistance in calculating the SE figures, or any other matters, please let us know.

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