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Sec. 6330(c)(4)(C), which states that an issue may not penalty defenses will not be considered in the partnership
be raised at the hearing if “a final determination has been adjustment proceedings, and thus the IRS should not be
made with respect to such issue in a proceeding brought able to argue that partners had a prior opportunity to
under subchapter C of chapter 63,” i.e., the tax treat- raise those defenses or that they were determined during
ment of partnership items. As explained above, however, the partnership-level proceedings, leaving CDP as an
the Proposed Regulations clearly state that partner-level option for partners.

ENDNOTES
* Ms. Brackney focuses her practice in the areas 8 Proposed Reg. §§301.6221(a)-1(a); 301.6225- are of interest because they are new, it may be

of civil and criminal tax controversies. She 2(d)(2)(viii); 301.6226-2(c)(6). some time before we are dealing with the audit
attended the University of Kansas School of 9 Proposed Reg. §301.6233(a)-1(c)(1)(v). and judicial review procedures, and there likely
Law and received her LL.M. in Taxation from New 10 Id. will be litigation under the TEFRA rules for many
York University. The author can be reached at 11 Proposed Reg. §301.6234-1(a). more years.
mbrackney@kflaw.com. 12 The proposed regulations define “partner-level 18 See Code Sec. 6230(a)(2)(A)(i); New Millennium
1 The Bipartisan Budget Act of 2015, P.L. 11474, defenses” as “those that are personal to the Trading LLC, 131 TC 275, 280–285, Dec. 57,620
§1101, 129 Stat. 584, 625–638 (Nov. 2, 2015); see reviewed year partner (for example, a reason- (2008); former Reg. §301.6221-1(c), (d).
also P.L. 114-113, div. Q (Dec. 18, 2015) (correct- able cause and good faith defense under section 19 Code Sec. 6230(c)(3)-(4); see, e.g., Kearney
ing and clarifying certain amendments made 6664(c) that is based on the facts and circum- Partners Fund, LLC, DC-FL, 2013-1 ustc ¶50,345,
by the BBA). Unless the partnership elected to stances applicable to the partner).” Proposed 946 FSupp2d 1302, 1314.
have the BBA provisions apply earlier, the BBA Reg. §301.6226-3(d)(3). 20 VisionMonitor Software, LLC, 108 TCM 256, Dec.
applies to partnership taxable years beginning 13 Proposed Reg. §301.6225-2(d)(2)(viii). 60,012(M), TC Memo. 2014-182, at *5.
after December 31, 2017. 14 Proposed Reg. §301.6226-3(d)(3). 21 Code Sec. 6330(c)(2)(B) states that “[t]he per-
2 Code Sec. 6221. 15 Proposed Reg. §301.6233(a)-1(c)(1). son may also raise at the hearing challenges
3 Code Secs. 6225, 6226. 16 83 FR 41954-01, at *41959. to the existence or amount of the underlying
4 83 FR 41954-01 (Aug. 17, 2018). 17 The Tax Equity and Fiscal Responsibility Act of tax liability for any tax period if the person did
5 American Boat Co., LLC, CA-7, 2009-2 ustc 1982 (“TEFRA”), P.L. 97-248, 96 Stat. 324 (codi- not receive any statutory notice of deficiency
¶50,665, 583 F3d 471, 486. fied at former Code Secs. 6221–6234). Although for such tax liability or did not otherwise have
6 Rawls Trading, LP, 104 TCM 211, Dec. 59,167(M), TC TEFRA was repealed (effective Jan. 1, 2018), its an opportunity to dispute such tax liability.”
Memo. 2012-240. provisions still apply to partnership returns for 22 C.A. McNeill, 148 TC No. 23, Dec. 60,938 (2017).
7 Code Sec. 6221(a). years prior to 2018. While the BBA provisions

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