Partnership AAR period may close before assessment period
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This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2019, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.
Plain-English summary
Chief Counsel explained that the section 6229 period can close while a partner's section 6501 assessment period remains open. Section 6229 supplies a minimum assessment period for partners, not a maximum period. Under section 6227, a partner generally must file an administrative adjustment request within three years after the partnership return was filed or due, whichever is later, with an extension tied to an extended section 6229 period. As a result, the IRS might still have time to issue a final partnership administrative adjustment for a partner even though the partner's time to file an administrative adjustment request has expired.
Ruling snapshot
- Question: Can the period for a partner to file an administrative adjustment request close while the assessment period remains open?
- Outcome: Advice given that the AAR period may close first.
- Key authorities: IRC §§ 6227, 6229, and 6501.
Full text (IRS public release)
ID: CCA_2019020708061743
UILC: 6229.00-00, 6227.00-00
Number: 201906007
Release Date: 2/8/2019
From:
Sent: Thursday, February 07, 2019 8:06:17 AM
To:
Cc:
Bcc:
Subject: RE: question re 702 regulations
The 6229 period can be closed even though the 6501 period is open. Section 6229 is a MINUMUM period under which no partner’s 6501 period expires, not a maximum. An AAR cannot be filed if the 6229 period has closed, even if the partner has an open 6501 period. See 6227(a)-(b). Under 6227, a partner AAR can be filed within 3 years of the partnership’s return being filed (or filing due date, if later). This period is extended if the 6229 period is extended such that a partner can file an AAR up until the end of the 6229 period plus 6 months (provided no FPAA has been issued).
Therefore, it could be the case that the time to issue an FPAA with respect to a partner is open (because the partner has an open 6501 period) but the period to file an AAR is closed.
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