Ezel / IRS Rulings / 201526014

Partnership withholding claim required an AAR

Number
201526014
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Administrative Adjustments Requests
Topics
Procedure, penalties, and administration
Code sections
§ 1446, § 6227
Ruling dated
June 3, 2015
Publicly released
June 26, 2015
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 2015, 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 2015
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 section 1446 withholding is a partnership item governed by the administrative adjustment request procedures. The partnership should have filed its claim on Form 8082 or Form 1065X under section 6227, and the abatement forms it used likely did not substantially comply. A proper AAR would allow the IRS to issue a refund, open a TEFRA proceeding, or take no action. The advice suggested no action might be appropriate because the partnership did not appear entitled to a refund on the merits. Foreign partners could still pursue separate refund claims based on their individual tax circumstances.

Ruling snapshot

  • Question: How should a partnership seek an adjustment or refund of section 1446 withholding?
  • Outcome: Advice given that the partnership claim required an AAR, while individual foreign partners might file separate refund claims.
  • Key authorities: IRC §§ 1446 and 6227(c)(2)(A).

Full text (IRS public release)

ID: CCA_2015060308384201 [Third Party Communication:

UILC: 6227.00-00 Date of Communication: Month DD, YYYY]

Number: 201526014
Release Date: 6/26/2015
From:
Sent: Wednesday, June 03, 2015 8:38:42 AM
To:
Cc:
Bcc:
Subject: RE: claim for abatement form 8804

Section 1446 withholding is a partnership item subject to the AAR procedures. The partnership’s claim should have been filed on a Form 8082 or 1065X under section 6227. If they followed this procedure (the abatement forms they used likely did not substantially comply with the required procedure) section 6227(c)(2)(A) would allow the Service to: (1) issue a refund; (2) open a TEFRA proceeding; or (3) take no action. This last action may be appropriate since it does not appear that a refund is warranted on the merits.

But it appears that the foreign partners may be entitled to refunds depending on their individual tax postures. They would need to file their own separate refund claims based on these separate partner-level considerations.

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