Early BBA election is optional for pre-2018 partnership years
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This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2023, 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 advised that a partnership is not required to elect into the BBA audit regime for a tax year beginning after November 2, 2015, and before January 1, 2018. A partnership may elect in if it is selected for audit or files an administrative adjustment request making the election. If it does not elect in, the year remains subject to TEFRA or non-TEFRA procedures as though the BBA rules did not exist. The BBA regime applies automatically to partnership tax years beginning on or after January 1, 2018.
Ruling snapshot
- Question: Must a partnership elect into the BBA regime for an eligible pre-2018 tax year?
- Outcome: Advice given, the early election is optional
- Key authorities: Treas. Reg. § 301.9100-22
Full text (IRS public release)
ID: CCA_2021120615364043 [Third Party Communication:
UILC: 9100.00-00, 6221B.00-00 Date of Communication: Month DD, YYYY]
Number: 202346009
Release Date: 11/17/2023
From: --------------------
Sent: Monday, December 6, 2021 3:36:40 PM
To: --------------------
Cc:
Bcc:
Subject: RE: BBA 101 Question
There is no requirement to elect in. A partnership may elect in for any taxable year
beginning after November 2, 2015 and before January 1, 2018 if we pick them up for
audit or they file an AAR electing in. See 301.9100-22. TEFRA is only repealed for
partnership taxable years beginning on or after January 1, 2018. So if the partnership
doesn’t elect in, it’s TEFRA or non-TEFRA as it would have been if BBA didn’t exist.
BBA starts on January 1, 2018 but there is a limited ability to elect in early.
Jenni Black
Senior Counsel
CC:PA:07
Phone: (202) 317-5216
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