Page 206 - 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
Mailing to the last known address of the partnership representative or the partnership constitutes adequate “notice.” 114
This explains the notices:
 Notice of Audit. The partnership audit begins with the Internal Revenue Service mailing to the partnership and to the partnership representative notice of the administrative proceeding.115
114 GENERAL EXPLANATION OF TAX LEGISLATION ENACTED IN 2015 (JCS-1-16, March 2016) states:
Notice of proceedings and adjustments
The centralized system contemplates three types of principal notifications by the Secretary to the partnership and the partnership representative in the course of an administrative proceeding with respect to that partnership. The notifications also apply to any proceeding with respect to an administrative adjustment request filed by a partnership.228 [228 Secs. 6231(a) and 6227.] These notices are (1) notice of any administrative proceeding initiated at the partnership level; (2) notice of a proposed partnership adjustment resulting from the proceeding; and (3) notice of any final partnership adjustment resulting from the proceeding. Such notices are sufficient if mailed to the last known address of the partnership representative or the partnership, even if the partnership has terminated its existence.
A notice of proposed adjustments informs the partnership of any adjustments tentatively determined by the Secretary and the amount of any imputed underpayment resulting from such adjustments. The issuance of a notice of proposed partnership adjustment begins the running of a period of 270 days in which to supply all information required by the Secretary in support of a request for modification. During that same period, the Secretary may not issue a notice of final partnership adjustment.229 [229 Sec. 6231(a).] The Secretary is required to establish procedures and timeframes for the modification process in published guidance, which may include conditions under which extensions of time in which to submit final documentation of a modification request may be permitted by the Secretary.230 [230 Sec. 6225(c)(7).]
With the issuance of a notice of final partnership adjustment to the partnership, a 90-day period begins during which the partnership may seek judicial review of the partnership adjustment. The issuance of a notice of final partnership adjustment also marks the beginning of the 45-day period in which the partnership may elect the alternative payment procedures.231 [231 Sec. 6226.] Further notices of adjustment or assessments of tax against the partnership with respect to the partnership taxable year that is the subject of the notice of final partnership adjustment are prohibited during the period in which judicial review may be sought or during which a judicial proceeding is pending (absent a showing of fraud, malfeasance, or misrepresentation of a material fact).232 [232 Sec. 6231(b).]
Any notice of partnership adjustment may be rescinded by the Secretary, if the partnership consents. If the notice is rescinded, it is a nullity, and does not confer a right to seek judicial review, nor does it bar issuance of further notices.
115 I.R.C. § 6231 provides:
SEC. 6231. NOTICE OF PROCEEDINGS AND ADJUSTMENT.
(a) IN GENERAL. – The Secretary shall mail to the partnership and the partnership representative –
(1) notice of any administrative proceeding initiated at the partnership level with respect to an adjustment of any item of income, gain, loss,
© Terence Floyd Cuff and Jerald David August, 2016
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