Confirm eligible member-manager before identifying tax matters partner

Plain-English summary

Chief Counsel advised that the LLC's tax matters partner is the member-manager designated under the applicable regulations. The available facts did not establish which of two members met that definition, although one LLC appeared to be acting as manager. The examiner therefore needed to confirm eligibility before proceeding. A foreign member could be designated if no U.S. member qualified as an eligible member-manager.

Ruling snapshot

• Question: Which LLC member qualified to serve as the tax matters partner?
• Outcome: Advice given to confirm member-manager eligibility before proceeding
• Key authorities: Treas. Reg. §§ 301.6231(a)(7)-1(b)(2) and 301.6231(a)(7)-2

Full text (IRS public release)

ID: CCA_2015010616301701 [Third Party Communication:

UILC: 6231.07-00
Date of Communication: Month DD, YYYY]

Number: 201503014
Release Date: 1/16/2015
From:
Sent: Tuesday, January 06, 2015 4:30:17 PM
To:
Cc:
Bcc:
Subject: RE: Form 2848-Qualified POA

The TMP is the member manager under Treas. Reg. 301.6231(a)(7)-2 who has been designated as TMP. The facts below do not indicate which of the two members meet this criteria, although it appears LLC2 is taking actions consistent with its being the manager. You will need to confirm this before doing anything else. If the foreign member is the only eligible TMP, then it is probably is the TMP. A foreign GP cannot be designated TMP if any U.S. member is eligible, but if the U.S. member does not meet the definition of an eligible member-manager under the -2 regulation, then the foreign member can be designated under -1(b)(2).