Ezel / IRS Rulings / 202346016
Chief Counsel Advice 202346016 Released November 17, 2023 Advice

Partner tax generally not collected after partnership pays imputed underpayment

Apply this to your situation

This page covers one taxpayer's ruling from 2023, which can't be cited as precedent. Ezel answers your situation under the current Code and IRS guidance, with citations.

Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, 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 reviewed a BBA examination case study in which a partnership paid the imputed underpayment and the example also appeared to assess tax against partners. The advice identified that treatment as the main concern. Generally, when the partnership pays the imputed underpayment, the IRS cannot separately assess or collect from a partner a partner-level tax caused by the partnership-related item adjustments. The advice recommended discussing revisions to the example.

Ruling snapshot

  • Question: After a partnership pays the BBA imputed underpayment, may the IRS also assess partners for tax resulting from the same partnership-related item adjustments?
  • Outcome: Advice given, generally no
  • Key authorities: IRC §§ 6221 and 6241

Full text (IRS public release)

 ID:         CCA_2023050114211948                                [Third Party Communication:

 UILC:       754.00-00, 741.00-00, 6221.00-                      Date of Communication: Month DD, YYYY]

             00, 6241.00-00
Number: 202346016
Release Date: 11/17/2023
From: ------------
Sent: Monday, May 1, 2023 2:21:19 PM
To: ---------------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
Bcc:
Subject: RE: 2023 Case Study - Ready for Counsel Review


Hi ---------,

Attached please find our comments to the slides and the factual summary
document. Our main concern is that the example appears to be assessing tax on the
partners as a result of the adjustments made in the BBA exam after the partnership
pays the IU. Generally when the partnership pays the IU, if a partner level tax results
because of the PRI adjustments, the Service cannot assess/collect against the partner
for that tax.

We think it may be helpful to schedule a call discuss our comments, and I am happy to
set up a call at a time / day convenient for you. Thank you!

Kind regards,
------

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

Get today's answer for your situation

You just read what the IRS ruled for one taxpayer in 2023, and it can't be cited as precedent. Ezel checks the current Internal Revenue Code and IRS guidance and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.