6229? 6501?

In Uncategorized on 01/23/2020 at 21:58

Judge James S (“Big Jim”) Halpern reminds us that Section 6229(a) is not a separate SOL, but only a one-year extender for Section 6501 three-year SOL, after a FPAA has run its course, and the fallout has to be distributed to the partners.

Judge Big Jim has all the cites in Ramat Associates, Wil-Coser Associates, A Partner Other Than The Tax Matters Partner, et al., Docket No. 22295-16, filed 1/23/20.

Ramat wants all the SNODs tossed because 3SOL. No, says Judge Big. Jim.

“Petitioner has a fundamental misunderstanding of the statutory limits on the period during which tax resulting from the adjustment of partnership items may be assessed against a partner. Section 6229(a) does not provide a separate period of limitations on that assessment. It serves only to extend, in some cases, the period of limitations under section 6501(a) on assessing tax against a partner.” Order, at p. 3.

“Section 6501(a) provides that the amount of any tax shall be assessed within 3 years from the date a taxpayer’s return is filed. The term ‘return’ for purposes of section 6501(a) does not include a return of any person from whom the taxpayer has received an item of income, gain, loss, deduction, or credit, e.g., a partnership return. Sec. 6501(a). Section 6501 provides the general period of limitations for assessing any tax imposed by the Code.

“Section 6229 establishes the minimum period for the assessment of any tax attributable to partnership items (or affected items) notwithstanding the period provided for in section 6501. Section 6229 is not a stand-alone statute of limitations but can extend the section 6501 period of limitations with respect to the tax attributable to partnership items or affected items.” Order, at pp. 3-4.

And IRS can assess even if 3SOL has run, provided there’s an open year into which any of the fallout from the FPAA has fallen, even though the transactions on which the fallout is based is a closed year.

But that’s a question of fact, so no summary J.

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