Page 188 - The TEFRA Partnership Audit Rules Repeal:

ALI CLE Live Video Webcast / “The TEFRA Partnership Audit Rules Repeal: Partnership and Partner Impacts” June 7, 2016, Jerald David August and Terence Floyd Cuff
j. Notices.
The partnership representative and the partnership receive –
 notice of any administrative proceeding initiated at the partnership level with respect to an adjustment of any item of income, gain, loss, deduction, or credit of a partnership for a partnership taxable year, or any partner’s distributive share thereof,
 notice of any proposed partnership adjustment resulting from the proceeding, and
 notice of any final partnership adjustment resulting from the proceeding.
k. Agency and Partnership Representative.
The partnership representative should have the legal relationship to the partnership as the partnership’s agent. “Agency is the fiduciary relationship that arises when one person (a “principal”) manifests assent to another person (an “agent”) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.”99
It is not clear to what extent the normal law of agency is overridden by the partnership audit provisions. Under general agency law,
 An agent has actual authority to take action designated or implied in the principal’s manifestations to the agent and acts necessary or incidental to achieving the principal’s objectives, as the agent reasonably understands the principal’s manifestations and objectives when the agent determines how to act.
 An agent’s interpretation of the principal’s manifestations is reasonable if it reflects any meaning known by the agent to be ascribed by the principal and, in the absence of any meaning known to the agent, as a reasonable person in the agent’s position would interpret the manifestations in light of the context, including circumstances of which the agent has notice and the agent’s fiduciary duty to the principal.
 An agent’s understanding of the principal’s objectives is reasonable if it accords with the principal’s manifestations and the inferences
99 Restatement (Third) of Agency § 1.01.
© Terence Floyd Cuff and Jerald David August, 2016
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