Form 872 can further extend an open partner assessment period

Plain-English summary

Chief Counsel advised that Form 872 extends a partner's section 6501 assessment period for all covered items, including partnership items specified in the form. Sections 6229(a) and 6229(d) may also keep that partner-level period open, but the agreement extends the underlying section 6501 period rather than the section 6229(d) extension itself. A power of attorney intended to cover TEFRA matters does not require special language when the surrounding circumstances show that intent, although clarifying language can remove ambiguity. If section 6501 remains open because of section 6229(d), the taxpayer or a properly authorized representative may execute another extension before it expires.

Ruling snapshot

• Question: Can Form 872 and a properly authorized representative extend a partner's section 6501 period while it remains open under section 6229(d)?
• Outcome: Advice given that a timely Form 872 can further extend the underlying partner assessment period.
• Key authorities: IRC §§ 6229(a), 6229(d), and 6501(c)(4).

Full text (IRS public release)

ID: CCA_2015060510220701 [Third Party Communication:

UILC: 6229.02-00
Date of Communication: Month DD, YYYY]

Number: 201526016
Release Date: 6/26/2015
From:
Sent: Friday, June 05, 2015 10:22:07 AM
To:
Cc:
Bcc:
Subject: RE: Questions on Form 872 - Extending the IRC 6229(d) statute - and POAs extending the IRC 6229(d) Statute

The 872 extends the partner’s section 6501 period for all items including partnership item specified in paragraph 4. That is all we need. Section 6229(a) and (d) also extend the partner’s section 6501 period. It is inaccurate to say that we are extending the subsection (d) extension period – we are extending the partner’s underlying statute. The 872 can have the effect of extending the section 6501 period beyond its extension provided by section 6229(d).

If the 2848 was intended to cover TEFRA matters, no special language is required in the POA. We add special language only to eliminate any potential ambiguity. For instance, if we secured the 2848 as part of the TEFRA audit, this would indicate it was intended to cover the TEFRA items regardless of whether they were specifically mentioned.

If the section 6501 period is currently open due to its extension by section 6229(d), and we secure a new extension by the taxpayer or his properly designated POA, this will further extend the partner’s section 6501 period because it has not yet expired on the date of its execution. See I.R.C. 6501(c)(4) which provides that the section 6501 period can be extended at any time before it expires.