Ezel / IRS Rulings / 201447031
Chief Counsel Advice 201447031 Released November 21, 2014 Advice

Exam must open tier-one TEFRA proceeding to dispute partnership items

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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

Chief Counsel advised that Exam could not challenge tier-one partnership items reported on the Schedule K-1 that tier one issued to a tier-two partnership. Tier two had used those items to calculate its outside basis in tier one. Under the consistency rules, the items could not be disputed solely through the examination of tier two. Exam would need to open a TEFRA partnership proceeding for tier one to challenge the tier-one partnership items.

Ruling snapshot

  • Question: Could Exam dispute tier-one Schedule K-1 items through tier two's outside-basis examination?
  • Outcome: Advice given that a separate TEFRA proceeding for tier one was required
  • Key authorities: IRC § 6222; Roberts v. Commissioner, 94 T.C. 853, 860-62

Full text (IRS public release)

ID: CCA_2014110608110401 [Third Party Communication:

UILC: 6231.03-00, 6222.00-00 Date of Communication: Month DD, YYYY]

Number: 201447031
Release Date: 11/21/2014
From:
Sent: Thursday, November 06, 2014 8:11:04 AM
To:
Cc:
Bcc:
Subject: RE: Outside basis and TEFRA

Exam cannot dispute the tier one partnership items on the K-1 it issued to tier two that
tier two used to compute its outside basis in tier one. I.R.C. 6222; Roberts v.
Commissioner, 94 T.C. 853, 860-62. Exam would have to open a TEFRA proceeding
for tier one in order to dispute tier one’s partnership items.

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