Page 214 - 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
contained in the Code for the assessment and collection of tax will apply except to the extent of an override in the centralized audit rules.
Assessment as a result of agreement by the partnership representative and the Internal Revenue Service. Assume that agreement is reached by the partnership representative, as the sole bargaining agent for the partnership, with the Internal Revenue Service. An imputed underpayment may be assessed after 90 days after the issuance of a notice of final partnership adjustment.
Notice of final partnership adjustment and no litigation occurs. Assume that no court proceeding is initiated within the 90-day period to file for judicial review by the partnership. The amount that can be assessed against the partnership is limited to the imputed underpayment, plus additions to tax, set forth in the notice.126
Assessment after culmination of legal proceedings. An imputed underpayment may be assessed after 90 days after entry of final decision of the legal proceedings is final.
Assessment after administrative adjustment request. In the case of an administrative adjustment request for which the adjustment is determined and taken into account by the partnership in the partnership taxable year in which the request is made,127 the imputed underpayment is required to be paid when the request is filed, and is assessed at that time. If the administrative adjustment request is subsequently audited and results in an imputed underpayment greater than that reported and paid with the originally filed request, the additional amount of the imputed underpayment may be assessed
the general rule prohibiting suits for the purpose of restraining the assessment or collection of any tax.239 [239 Sec. 7421(a).] The Tax Court has no jurisdiction to enjoin any such premature action unless a timely petition for judicial review has been filed,240 [240 Sec. 6234.] and then only in respect of the adjustments that are the subject of the petition.
Several exceptions to the restrictions on assessment are provided.241 [241 Sec. 6232(d).] First, rules similar to the math error authority under section 6213(b) are permitted as exceptions to the restrictions on assessment described above. The exceptions apply to instances in which a partnership is notified that adjustments to its return are necessary to correct errors arising from mathematical or clerical errors and in the case of a tiered partnership that fails to prepare its partnership return consistently with that of the partnership in which it is a partner. In the case of an inconsistent return position, the rules similar to those in section 6213(b) (providing for subsequent abatement of any resulting assessments if challenged within 60 days) are not applicable. Finally, a partnership may waive the restrictions on the making of any partnership adjustment.
126 I.R.C. § 6232(e).
127 I.R.C. §§ 6232(a) and 6227(b)(1).
© Terence Floyd Cuff and Jerald David August, 2016
145