26 U.S.C. § 6221

Determination at partnership level

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(a) In general

Any adjustment to a partnership-related item shall be determined, and any tax attributable thereto shall be assessed and collected, and the applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item shall be determined, at the partnership level, except to the extent otherwise provided in this subchapter.

(b) Election out for certain partnerships with 100 or fewer partners, etc.(1) In generalThis subchapter shall not apply with respect to any partnership for any taxable year if—(A) the partnership elects the application of this subsection for such taxable year,(B) for such taxable year the partnership is required to furnish 100 or fewer statements under section 6031(b) with respect to its partners,(C) each of the partners of such partnership is an individual, a C corporation, any foreign entity that would be treated as a C corporation were it domestic, an S corporation, or an estate of a deceased partner,(D) the election—(i) is made with a timely filed return for such taxable year, and(ii) includes (in the manner prescribed by the Secretary) a disclosure of the name and taxpayer identification number of each partner of such partnership, and(E) the partnership notifies each such partner of such election in the manner prescribed by the Secretary.(2) Special rules relating to certain partners(A) S corporation partnersIn the case of a partner that is an S corporation—(i) the partnership shall only be treated as meeting the requirements of paragraph (1)(C) with respect to such partner if such partnership includes (in the manner prescribed by the Secretary) a disclosure of the name and taxpayer identification number of each person with respect to whom such S corporation is required to furnish a statement under section 6037(b) for the taxable year of the S corporation ending with or within the partnership taxable year for which the application of this subsection is elected, and(ii) the statements such S corporation is required to so furnish shall be treated as statements furnished by the partnership for purposes of paragraph (1)(B).(B) Foreign partners

For purposes of paragraph (1)(D)(ii), the Secretary may provide for alternative identification of any foreign partners.

The Secretary may by regulation or other guidance prescribe rules similar to the rules of subparagraph (A) with respect to any partners not described in such subparagraph or paragraph (1)(C).

(Added Pub. L. 114–74, title XI, § 1101(c)(1), Nov. 2, 2015, 129 Stat. 625; amended Pub. L. 115–141, div. U, title II, § 201(c)(2), Mar. 23, 2018, 132 Stat. 1173.)Editorial NotesPrior Provisions

A prior section 6221, added Pub. L. 97–248, title IV, § 402(a), Sept. 3, 1982, 96 Stat. 648; amended Pub. L. 105–34, title XII, § 1238(a), Aug. 5, 1997, 111 Stat. 1026, related to tax treatment determined at partnership level, prior to repeal by Pub. L. 114–74, title XI, § 1101(a), Nov. 2, 2015, 129 Stat. 625.

Amendments

2018—Subsec. (a). Pub. L. 115–141 amended subsec. (a) generally. Prior to amendment, text read as follows: “Any adjustment to items of income, gain, loss, deduction, or credit of a partnership for a partnership taxable year (and any partner’s distributive share thereof) shall be determined, any tax attributable thereto shall be assessed and collected, and the applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share shall be determined, at the partnership level pursuant to this subchapter.”

Statutory Notes and Related SubsidiariesEffective Date of 2018 Amendment

Amendment by Pub. L. 115–141 effective as if included in section 1101 of Pub. L. 114–74, see section 207 of Pub. L. 115–141, set out as a note under section 6031 of this title.

Effective Date

Pub. L. 114–74, title XI, § 1101(g), Nov. 2, 2015, 129 Stat. 638, provided that:“(1)In general.—Except as otherwise provided in this subsection, the amendments made by this section [enacting this subchapter, amending sections 6031, 6330, 6422, 6501, 6503, 6504, 6511, 6512, 6515, 6601, 7421, 7422, 7459, 7482, and 7485 of this title, and repealing this subchapter, subchapter D of this chapter, and part IV of subchapter K of chapter 1 of this title] shall apply to returns filed for partnership taxable years beginning after December 31, 2017.“(2)Administrative adjustment requests.—In the case of [an] administrative adjustment request under section 6227 of such Code [Internal Revenue Code of 1986], the amendments made by this section shall apply to requests with respect to returns filed for partnership taxable years beginning after December 31, 2017.“(3)Adjusted partners statements.—In the case of a partnership electing the application of section 6226 of such Code, the amendments made by this section shall apply to elections with respect to returns filed for partnership taxable years beginning after December 31, 2017.“(4)Election.—A partnership may elect (at such time and in such form and manner as the Secretary of the Treasury may prescribe) for the amendments made by this section (other than the election under section 6221(b) of such Code (as added by this Act)) to apply to any return of the partnership filed for partnership taxable years beginning after the date of the enactment of this Act [Nov. 2, 2015] and before January 1, 2018.”

Notes of Decisions

Cited in 117 cases (8 in the last 5 years), 1989–2026 · leading case: Prati v. United States, 81 Fed. Cl. 422 (Fed. Cl. 2008).

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Prati v. United States, 81 Fed. Cl. 422 (Fed. Cl. 2008). · cites it 5× “§ 6229 (a)); (2) Tax-motivated interest (“TMI”) refund claims for all three years (based on 26 U.S.C. § 6221 (c)); and (3) interest abatement (“IA”) refund claims for all three years (based on 26 U.”

John Bedrosian v. Cir, 940 F.3d 467 (9th Cir. 2019). · cites it 5× “CIR 5 of 1982 (TEFRA), 26 U.S.C. §§ 6221–6233.1 See Woods, 571 U.”

Klamath Strategic Inv. Fund Ex Rel. St. Croix Ventures v. United States, 568 F.3d 537 (5th Cir. 2009). · cites it 2× “” 26 U.S.C. § 6221 . TEFRA specifically sets forth the scope of judicial review: A court with which a petition is filed in accordance with this section shall have jurisdiction to determine all partnership items of the partnership for the partnership taxable year to which the…”

Fid. Int'l Currency Advisor a Fund, LLC v. United States, 747 F. Supp. 2d 49 (D. Mass. 2010). · cites it 3× “See 26 U.S.C. §§ 6221 and 6226(f). Unlike other judicial tax proceedings, such a decision does not determine the amount of tax owed by a taxpayer or the amount of any refund of tax due to a taxpayer.”

Duffie v. United States, 600 F.3d 362 (5th Cir. 2010). “” 26 U.S.C. § 6221 . TEFRA “created a single unified procedure for determining the tax treatment of all partnership items at the partnership level, rather than separately at the partner level.”

United States v. Woods, 134 S. Ct. 557 (2013). “648 (codified as amended at 26 U.S.C. §§ 6221 - 6232 (2006 ed. and Supp.”

Adkison v. Comm'r, 592 F.3d 1050 (9th Cir. 2010). · cites it 2× “26 U.S.C. § 6221 ; see also Wall v. United States, 133 F.”

AWG Leasing Trust v. United States, 592 F. Supp. 2d 953 (N.D. Ohio 2008). · cites it 2× “26 U.S.C. §§ 6221 , 6226(f). The Government bears the burden of production on the issue of the applicability of penalties, but the Plaintiffs carry the ultimate burden of proof in challenging such penalties.”

Stobie Creek Investments LLC v. United States, 608 F.3d 1366 (Fed. Cir. 2010). “26 U.S.C. §§ 6221 , 6226(f). I. Economic Substance Doctrine The primary question before this court is whether the transactions implementing the J & G strategy were properly disregarded under the economic substance doctrine.”

Alan H. Ginsburg v. United States, 17 F.4th 78 (11th Cir. 2021). · cites it 3× “648 (codified as amended USCA11 Case: 19-11836 Date Filed: 10/26/2021 Page: 4 of 20 19-11836 Opinion of the Court 4 at 26 U.S.C. §§ 6221–6232 (2006 ed. and Supp.”

Petaluma FX Partners, LLC v. Comm'r of Internal Revenue Serv., 591 F.3d 649 (D.C. Cir. 2010). “26 U.S.C. § 6221 . When the IRS disagrees with how a partnership return reports partnership items, it may commence an administrative proceeding by issuing a notice of final partnership administrative adjustment (“FPAA”) to the partners.”

Bob Hamric Chevrolet, Inc. v. USA, Internal Revenue Serv., 849 F. Supp. 500 (W.D. Tex. 1994). · cites it 3× “Unix was subject to the partnership audit and litigation procedures set forth in 26 U.S.C. § 6221 , et seq. (the “TEFRA Procedures”).”

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— 26 U.S.C. § 6221(c) — 1 case

Alfonso Varela v. United States (5th Cir. 2013).

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