My readers doubtless recall the flurry of articles and blogposts a dozen years ago as the Bipartisan Budget Act of 2015 (BBA) was wending its way into law, AFAIK the last enactment to bear the title “Bipartisan.” But I recall none thereof discussing the problem of the misdesignated partnership representative (whom I call the PaRep, but whom Judge Christian N. (“Speedy”) Weiler calls the “PR.”  I’ll use Judge Speedy Weiler’s abbreviation hereafter). 

Judge Speedy Weiler has to confront the issue today in Infinity Cycle, LLC, John L. Green, Partnership Representative, Docket No. 9369-24, filed 3/12/26. B, managing member and 99% interest holder in Infinity Cycle, didn’t designate a PR in its 1065, but subsequently filed Form 8979, Partnership Representative Revocation, Designation, and Resignation, designating his attorney K as its PR for year at issue; names omitted.

When the FPA hit, B tried reaching K, but discovered K was ill and no longer practicing law, so B had Green, attorney for the partnership, file the petition timely. IRS answered, and five (count ’em, five) months later amends, alleging the petition didn’t name the PR or provide the contact info the regs require, so is ineffective and should be tossed. Infinity Cycle files a new 8979, but gets it wrong by not putting in the relevant year(s) for which PR acts and put the new PR, Green, in the wrong place among entities. IRS moves to toss the petition.

Judge Weiler loads up the “somber reasoning and copious citation of precedent” cannons.

“Compliance with Treasury Regulation § 301.6223 and the subsequent revocation and designation of a PR under section 6223 are not the only issues before us. Rather, the precise question here is whether we have jurisdiction under the Code to consider a Petition after amendment and when a succeeding PR ratifies the original filing.” Order, at p. 4.

Rule 60(a) provides for ratification if the right person didn’t sign on to the petition. There’s bushelbasketsful of old TEFRA precedent that BBA didn’t wipe out. And Mr. B submits an affidavit telling the whole tale.

“Here, the original Petition was timely filed by the attorney representing Infinity Cycle. Mr. Green was retained by Mr. B—the managing member of Infinity Cycle. Mr. B authorized Mr. Green to respond to the FPA, and under the circumstances, file a Petition with the Court on behalf of Infinity Cycle. If we were to grant respondent’s Motion to Dismiss, then Infinity Cycle and its partners would have no judicial remedy with respect to the partnership adjustments determined in the FPA. We find the evidence surrounding the filing of this Petition–namely with authorization from the managing member of Infinity Cycle–to be compelling.” Order, at p. 5. (Name omitted.)

“Respondent contends that Form 8979, submitted by Infinity Cycle, was incomplete and not a valid revocation under Treasury Regulation § 301.6223-1(e) since the form did not indicate for which taxable year the Partnership was changing its PR, and incorrectly revoked an entity partnership representative (and designated individual), when in fact K was previously designated as an individual PR for Infinity Cycle. Petitioner argues that while there may have been inconsistencies in revocation and designation of Mr. Green as successor PR, the submission to IRS nevertheless substantially complied with Treasury Regulation §301.6223-1(e). Petitioner contends that the minor discrepancies were not material to Form 8979 as the IRS received actual notice of Infinity Cycle’s intent to designate a new PR. We agree, and conclude the PR revocation made by Infinity Cycle, followed by subsequent designation of Mr. Green, substantially complies with Treasury Regulation § 301.6223-1(e)(5).” Order, at pp. 6-7.

While substantial compliance isn’t always applied, since where compliance is essential to fulfillment of the statute there is no room for “good enough,” where the rule is merely procedural or directory good enough is good enough.

“Under the BBA, the introduction of the concept of the partnership representative was ‘intended to address the shortcomings of the TMP as the representative of the partnership under TEFRA.’ Centralized Partnership Audit Regime, 82 Fed. Reg. 27334, 27338 (June 14, 2017) (proposed regulations). These resolutions to shortcomings included broader selection of those who can be a PR—including a nonpartner—and it provided that the PR had the sole authority to bind the partnership and any final decisions in a proceeding brought under subchapter C of chapter 63. Id. at 27338–39. The purpose of Treasury Regulation § 301.6223-1(e) is to ‘provide[] flexibility to the partnership in [certain] circumstances [where the partnership would like to change the designation], allowing the partnership, through its partners, to revoke a prior designation.” Id. at 27348. Consistent with its purpose we conclude that Treasury Regulation §301.6223-1(e) is merely procedural. A PR was established to be a centralized authority for the partnership. Overall, Treasury Regulation § 301.6223-1(e) requires a taxpayer to inform the IRS by written notice for revocation of a PR and appointment of a successor PR. Therefore, substantial compliance with the requirement will suffice.” Order, at p. 7.

And, ultimately, “respondent does not contend these two discrepancies prejudice the IRS or failed to provide actual notice of the successor PR as required under the regulations.” Order, at p. 8. 

Anyway, Rule 256.6(a) gives Tax Court the power to “take such action as may be necessary to establish the identity of the partnership representative.” Order, at p. 8. Judge Speedy Weiler says he runs his own docket. 

No hurt, no foul.

So welcome aboard, Green, salute the quarterdeck and stand to your kit. And here’s a Taishoff “Good Job, First Class” to pin on your dress blues.