Chief Counsel advises that only one FPAA generally issues per partnership year, with a tiered-partnership exception

Number

202007017

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Notice to Partners of Proceedings

Topics

Procedure, penalties, and administration

Code sections

§ 6223, § 6230

Ruling dated

November 20, 2019

Publicly released

February 14, 2020

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 2020, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

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

This short Chief Counsel email answers whether the IRS can issue more than one Final Partnership Administrative Adjustment (FPAA) for the same partnership tax year under the old TEFRA partnership audit rules. The general answer is no: under IRC § 6223(f), the IRS may issue only one FPAA for a given year unless there is fraud, malfeasance, or misrepresentation of a material fact. The email notes one exception: when a TEFRA partnership is itself a partner in another TEFRA partnership and partner-level factual determinations are needed at the upper-tier partnership to apply the results of the lower-tier proceeding, the IRS may issue an FPAA to make those partner-level determinations, citing IRC
§ 6230(a)(2)(C) and American Milling, LP v. Commissioner.

Ruling snapshot

Question: May the IRS issue multiple FPAAs for a single TEFRA partnership taxable year?
Outcome: advice (generally no, absent fraud/malfeasance/misrepresentation; a tiered-partnership exception applies for partner-level determinations)
Key authorities: IRC §§ 6223(f), 6230(a)(2)(C); American Milling, LP v. Commissioner, T.C. Memo. 2015-192

Full text (IRS public release)

ID: CCA_2019112008475043
UILC: 6223.00-00, 6230.01-00

Number: 202007017
Release Date: 2/14/2020
From:
Sent: Wednesday, November 20, 2019 8:47:50 AM
To:
Cc:
Bcc:
Subject: RE: Are multiple FPAAs possible?

Generally, no. With regard to making adjustments in an examination of the partnership the IRS may only issue one FPAA for a particular taxable year, absent fraud, malfeasance, or misrepresentation of material fact. I.R.C. section 6223(f). However, if a TEFRA partnership (TP2) is a partner in another TEFRA partnership (TP1) and partner- level factual determinations are needed at the TP2 level in order to apply the results of the final determination in the TP1 TEFRA proceeding, an FPAA may be issued to TP2 to make those partner-level factual determinations (like an affected item SND). See I.R.C. section 6230(a)(2)(C); Am. Milling, LP v. Comm’r, T.C. Memo. 2015-192.

----------------
---------------------
--------------
-------------------------------

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

Checks the law as it stands today, not only this page
Cites every source it relies on, so you can verify it
Chat, drafting and research in one workspace