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TEFRA

Field Advice – No partnership existed for tax purposes because there was no risk of loss or chance of gain

Field Advice – No partnership existed for tax purposes because there was no risk of loss or chance of gain

Legal Advice Issued by Field Attorneys 20161101F In a highly redacted Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that a taxpayer’s investment in an arrangement which was to provide it with Code Sec. 45 refined coal production tax credits wasn’t a bona fide partnership. The purported partner did not engage in a […]

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Blue Book on 2015 Legislation Explains “Election Out” of Revised Partnership Audit Rules

Blue Book on 2015 Legislation Explains “Election Out” of Revised Partnership Audit Rules

General Explanation of “Tax Legislation Enacted in 2015,” prepared by the staff of the Joint Committee on Taxation (JCS-1-16, March 2016). The staff of the Joint Committee on Taxation (JCT) has published a “General Explanation of Tax Legislation Enacted in 2015,” also known as the “Blue Book.” It contains helpful explanations on 13 different laws […]

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Chief Counsel attorneys instructed on CDP proceedings following TEFRA audit

Chief Counsel attorneys instructed on CDP proceedings following TEFRA audit

Chief Counsel Notice 2016-007 Chief Counsel Notice 2016-007, Application of the Results of TEFRA Partnership Procedures in Collection Due Process Cases (Mar. 21, 2016). In a Chief Counsel Notice, IRS has instructed its attorneys on how the results from a TEFRA unified partnership audit and litigation procedure (so-called because those procedures were introduced in the […]

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Comments sought on issues relating to implementation of new partnership audit rules

Comments sought on issues relating to implementation of new partnership audit rules

Notice 2016-23, 2016-12 IRB In a Notice, IRS is seeking comments on the new partnership audit regime, enacted as part of the Bipartisan Budget Act of 2015 (P.L. 114-74, the BBA). The new audit regime is generally effective for tax years beginning after 2017, but parts of it can apply at the partnership’s election to […]

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Partnership fails in attempt to get Tax Court to halt IRS proceeding against partner

Partnership fails in attempt to get Tax Court to halt IRS proceeding against partner

Endeavor Partners Fund, LLC, TC Memo 2016-12 The Tax Court has rejected a partnership’s motion to enjoin IRS from taking any further action in its separate administrative proceeding against an indirect partner of the partnership until the Court ruled on the partnership’s Tax Court petition. It also rejected the partnership’s motion that the Court certify […]

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Assessment on partner void; IRS couldn’t prove it was based on computational adjustment

Assessment on partner void; IRS couldn’t prove it was based on computational adjustment

Mandich, (Ct Fed Cl 11/6/2015) 116 AFTR 2d ¶ 2015-5400 The Court of Federal Claims decided three issues involving a partner in a partnership, including finding that an assessment of taxes on the partner, that was not preceded by the issuance of a notice of deficiency, was improper because the Court was not convinced that […]

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November 4 — Public Law number assigned to budget agreement that eliminates TEFRA and large partnership audit rules

November 4 — Public Law number assigned to budget agreement that eliminates TEFRA and large partnership audit rules

A Public Law number has been assigned to H.R. 1314, the “Bipartisan Budget Agreement of 2015” — P.L. 114-74. The Act which was signed by the president into law on Nov. 3, 2015, lifts mandatory spending caps on defense and domestic programs, raises the federal debt ceiling, and includes important tax provisions. Effective generally for […]

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November 3 — President signs into law budget agreement that eliminates TEFRA and electing large partnership audit rules

November 3 — President signs into law budget agreement that eliminates TEFRA and electing large partnership audit rules

On November 2, President Obama signed into law H.R. 1314, the “Bipartisan Budget Agreement of 2015”, which lifts mandatory spending caps on defense and domestic programs, raises the federal debt ceiling, and includes important tax provisions. Effective generally for returns filed for partnership tax years beginning after Dec. 31, 2017, the new law eliminates the […]

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Similarity to related partnership’s issues didn’t preclude Tax Court jurisdiction

Similarity to related partnership’s issues didn’t preclude Tax Court jurisdiction

American Milling, LP, TC Memo 2015-192 The Tax Court has held that it had jurisdiction with respect to various issues contained in a Notice of Final Partnership Administrative Adjustment (FPAA) issued to a partnership that was a partner in a lower tier partnership. It rejected the taxpayer’s arguments that: a) the FPAA was a “reproduction” […]

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Supreme Court won’t review case on partner’s ability to make partial election out of TEFRA

Supreme Court won’t review case on partner’s ability to make partial election out of TEFRA

JT USA LP; JTR-LLC; Tax Matters Partner, (CA 9 11/14/2014) 114 AFTR 2d 2014-6608, cert denied 10/5/2015 The Supreme Court has declined to review a decision of the Court of Appeals for the Ninth Circuit that held that unless a partner elects to have all of his or her partnership items treated as nonpartnership items, the partner […]

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Tax Court upholds validity of FPAA & jurisdiction to hear partnership case

Tax Court upholds validity of FPAA & jurisdiction to hear partnership case

Green Gas Delaware Statutory Trust, TC Memo 2015-168 The Tax Court has concluded that the Final Partnership Administrative Adjustment (FPAA) issued by IRS to a trust taxed as a partnership was valid and that the Court had jurisdiction over the case. In so holding, the Court rejected the taxpayer’s challenges to the timing of IRS’s […]

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Tax Court holds partnership’s agreement to extend SOL was valid because signer had apparent authority

Tax Court holds partnership’s agreement to extend SOL was valid because signer had apparent authority

Summit Vineyard Holdings LLC, TC Memo 2015-140 The Tax Court has held that the execution of Form 872-P to extend the limitations period for a partnership’s tax year was valid because, although the person who signed that form didn’t have actual authority to do so, he had apparent authority, under contract law, to do so. […]

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DC Circuit applies Supreme Court’s holding on partnership item & outside basis

DC Circuit applies Supreme Court’s holding on partnership item & outside basis

Tigers Eye Trading, LLC, et al. v. Comm (CA DC 6/26/2015) 115 AFTR 2d ¶ 2015-862 Based on the Supreme Court’s recent holding in Woods, the Court of Appeals for the District of Columbia Circuit (DC Circuit) has affirmed the Tax Court’s decision that the Code Sec. 6662(h) gross valuation misstatement penalty applied to a partner in […]

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Court of Appeals: Applicability of penalties may be determined in partnership level proceeding

Court of Appeals: Applicability of penalties may be determined in partnership level proceeding

Petaluma FX Partners LLC, (CA DC 6/26/2015) 115 AFTR 2d ¶ 2015-863 In the latest in a long series of cases involving whether certain issues can be decided in partnership-level court proceedings, the Court of Appeals for the District of Columbia has held that the Tax Court, in a partnership-level proceeding, had jurisdiction to determine […]

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IRS Clarifies Role of its Partnership Audit Tool and the Requirement to Notify Partners

IRS Clarifies Role of its Partnership Audit Tool and the Requirement to Notify Partners

Legal Advice Issued by Associate Chief Counsel 2015-003 In generic legal advice, the Associate Chief Counsel (Procedure & Administration) has concluded that in the course of a TEFRA partnership exam, IRS isn’t required to link or not link any, all, or some partners in a partnership on its Partnership Control System (PCS) database. The Associate […]

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Tax Court: Legal fees paid by sham partnership partner were factual affected items under TEFRA rules

Tax Court: Legal fees paid by sham partnership partner were factual affected items under TEFRA rules

Bedrosian, (2015) 144 TC No. 10 The Tax Court has held that the issue of whether legal fees paid by a partner in a sham partnership were deductible, where it wasn’t clear which of the partner’s matters were covered by those fees, was a factual affected item. Thus, the Court had jurisdiction with respect to […]

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Gain from corporate distribution in sham transaction triggered 6-year assessment period

Gain from corporate distribution in sham transaction triggered 6-year assessment period

CNT Investors, LLC, Charles C, Carrol, Tax Matters Partner, (2015) 144 TC No. 11   The Tax Court has concluded that while it had to disregard any omitted gain that was attributable solely to the basis overstatement in a sham Son-of-BOSS transaction to determine if a 6-year assessment period applied, the corporate distribution of property […]

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Who Is Authorized To Sign A Power Of Attorney For A Partnership Or LLC?

Who Is Authorized To Sign A Power Of Attorney For A Partnership Or LLC?

Legal Advice Issued by Associate Chief Counsel 2015-004 In Legal Advice Issued by Associate Chief Counsel, IRS has provided guidance on who is authorized to sign a power of attorney (POA) appointing a representative for a partnership or limited liability company (LLC) with respect to various situations, including when the entity is being examined in […]

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IRS provides guidance on empowerment zone designations in light of TIPA

IRS provides guidance on empowerment zone designations in light of TIPA

Notice 2015-26, 2015-11 IRB In a Notice, IRS has explained how a State or local government amends the nomination of an empowerment zone to provide for a new termination date, as provided for by Code Sec. 1391, as amended by the Tax Increase Prevention Act of 2014 (TIPA, P.L. 113-295, 12/19/2014). Background. Under Code Sec. 1391, […]

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TEFRA Doesn’t Apply to Employment Tax Examinations or Worker Classification Proceedings

TEFRA Doesn’t Apply to Employment Tax Examinations or Worker Classification Proceedings

Legal Advice Issued by Field Attorneys 20145001F   In Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that the unified partnership audit rules under the Tax Equity and Fiscal Responsibility Act of ’82 (TEFRA, (P.L. 97-248)), as codified in Code Sec. 6221 – Code Sec. 6234 , don’t apply to employment tax examinations […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney