26 U.S.C. § 6231 — Notice of proceedings and adjustment

Page 3541 TITLE 26—INTERNAL REVENUE CODE § 6231 (2) by the partnership and partners under rules similar to the rules of section 6226 (de- termined without regard to the substitution described in subsection (c)(2)(C) thereof). In the case of an adjustment that would not re- sult in an imputed underpayment, paragraph (1) shall not apply and paragraph (2) shall apply with appropriate adjustments. (c) Period of limitations A partnership may not file such a request more than 3 years after the later of— (1) the date on which the partnership return for such year is filed, or (2) the last day for filing the partnership re- turn for such year (determined without regard to extensions). In no event may a partnership file such a re- quest after a notice of an administrative pro- ceeding with respect to the taxable year is mailed under section 6231. (d) Coordination with adjustments related to for- eign tax credits The Secretary shall issue regulations or other guidance which provide for the proper coordina- tion of this section and section 905(c). (Added Pub. L. 114–74, title XI, § 1101(c)(1), Nov. 2, 2015, 129 Stat. 631; amended Pub. L. 115–141, div. U, title II, §§ 201(c)(5), 206(f), (p)(2), (3), Mar. 23, 2018, 132 Stat. 1173, 1179, 1182.) Editorial Notes PRIOR PROVISIONS Prior sections 6227 to 6230 were repealed by Pub. L. 114–74, title XI, § 1101(a), (g), Nov. 2, 2015, 129 Stat. 625, 638, applicable to returns filed for partnership taxable years beginning after Dec. 31, 2017. Section 6227, added Pub. L. 97–248, title IV, § 402(a), Sept. 3, 1982, 96 Stat. 655; amended Pub. L. 105–34, title XII, §§ 1236(a), 1243(a), Aug. 5, 1997, 111 Stat. 1025, 1029; Pub. L. 107–147, title IV, § 417(19)(A), Mar. 9, 2002, 116 Stat. 56, related to administrative adjustment requests. Section 6228, added Pub. L. 97–248, title IV, § 402(a), Sept. 3, 1982, 96 Stat. 656; amended Pub. L. 97–448, title III, § 306(c)(1)(B), Jan. 12, 1983, 96 Stat. 2406; Pub. L. 102–572, title IX, § 902(b)(2), Oct. 29, 1992, 106 Stat. 4516; Pub. L. 107–147, title IV, § 417(19)(B), Mar. 9, 2002, 116 Stat. 56, related to judicial review where administra- tive adjustment request is not allowed in full. Section 6229, added Pub. L. 97–248, title IV, § 402(a), Sept. 3, 1982, 96 Stat. 659; amended Pub. L. 99–514, title XVIII, § 1875(d)(1), Oct. 22, 1986, 100 Stat. 2896; Pub. L. 100–647, title I, § 1018(o)(3), Nov. 10, 1988, 102 Stat. 3585; Pub. L. 105–34, title XII, §§ 1233(a)–(c), 1235(a), Aug. 5, 1997, 111 Stat. 1023, 1024; Pub. L. 107–147, title IV, § 416(d)(1)(B), Mar. 9, 2002, 116 Stat. 55; Pub. L. 111–147, title V, § 513(a)(2)(B), Mar. 18, 2010, 124 Stat. 112, related to period of limitations for making assessments. Section 6230, added Pub. L. 97–248, title IV, § 402(a), Sept. 3, 1982, 96 Stat. 660; amended Pub. L. 98–369, div. A, title VII, § 714(p)(2)(A), July 18, 1984, 98 Stat. 964; Pub. L. 99–514, title XVIII, § 1875(d)(2)(A), Oct. 22, 1986, 100 Stat. 2896; Pub. L. 100–647, title I, § 1018(o)(1), Nov. 10, 1988, 102 Stat. 3584; Pub. L. 102–572, title IX, § 902(b)(2), Oct. 29, 1992, 106 Stat. 4516; Pub. L. 105–34, title XII, §§ 1237(a)–(c)(1), 1238(b)(2)–(6), 1239(c)(1), Aug. 5, 1997, 111 Stat. 1025–1028; Pub. L. 105–206, title III, § 3201(e)(2), July 22, 1998, 112 Stat. 740; Pub. L. 110–172, § 11(a)(36), Dec. 29, 2007, 121 Stat. 2487, related to addi- tional administrative provisions. AMENDMENTS 2018—Subsec. (a). Pub. L. 115–141, § 201(c)(5), sub- stituted ‘‘partnership-related items’’ for ‘‘items of in- come, gain, loss, deduction, or credit of the partner- ship’’. Subsec. (b). Pub. L. 115–141, § 206(p)(2), substituted ‘‘is filed’’ for ‘‘is made’’ in introductory provisions and in par. (1). Subsec. (b)(1). Pub. L. 115–141, § 206(p)(3), which di- rected substitution of ‘‘paragraphs (2), (7), and (9)’’ for ‘‘paragraphs (2), (6), and (7)’’, was executed by making the substitution for ‘‘paragraphs (2), (6) and (7)’’ to re- flect the probable intent of Congress. Subsec. (d). Pub. L. 115–141, § 206(f), added subsec. (d). Statutory Notes and Related Subsidiaries EFFECTIVE 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 Section applicable to returns filed for partnership taxable years beginning after Dec. 31, 2017, with certain exceptions, see section 1101(g) of Pub. L. 114–74, set out as a note under section 6221 of this title. PART III—PROCEDURE Sec. 6231. Notice of proceedings and adjustment. 6232. Assessment, collection, and payment. 6233. Interest and penalties. 6234. Judicial review of partnership adjustment. 6235. Period of limitations on making adjustments. Editorial Notes AMENDMENTS 2018—Pub. L. 115–141, div. U, title II, § 206(p)(11), Mar. 23, 2018, 132 Stat. 1183, amended part heading generally, substituting ‘‘PART III—PROCEDURE’’ for ‘‘PART 1— PROCEDURE’’. § 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 partnership-related item for any partnership taxable year, or any partner’s distributive share thereof, (2) notice of any proposed partnership ad- justment resulting from such proceeding, and (3) notice of any final partnership adjust- ment resulting from such proceeding. Any notice of a final partnership adjustment shall be sufficient if mailed to the last known address of the partnership representative or the partnership (even if the partnership has termi- nated its existence). The first sentence shall apply to any proceeding with respect to an ad- ministrative adjustment request filed by a part- nership under section 6227. (b) Timing of notices (1) Notice of proposed partnership adjustment Any notice of a proposed partnership adjust- ment shall not be mailed later than the date determined under section 6235 (determined without regard to paragraphs (2) and (3) of sub- section (a) thereof). (2) Notice of final partnership adjustment (A) In general Except to the extent that the partnership elects to waive the application of this sub- Page 3542 TITLE 26—INTERNAL REVENUE CODE § 6232 paragraph, any notice of a final partnership adjustment shall not be mailed earlier than 270 days after the date on which the notice of the proposed partnership adjustment is mailed. (B) Statute of limitations on adjustment For the period of limitations on making adjustments, see section 6235. (c) Further notices restricted If the Secretary mails a notice of a final part- nership adjustment to any partnership for any partnership taxable year and the partnership files a petition under section 6234 with respect to such notice, in the absence of a showing of fraud, malfeasance, or misrepresentation of a material fact, the Secretary shall not mail an- other such notice to such partnership with re- spect to such taxable year. (d) Authority to rescind notice with partnership consent The Secretary may, with the consent of the partnership, rescind any notice of a partnership adjustment mailed to such partnership. Any no- tice so rescinded shall not be treated as a notice of a partnership adjustment for purposes of this subchapter, and the taxpayer shall have no right to bring a proceeding under section 6234 with re- spect to such notice. (Added Pub. L. 114–74, title XI, § 1101(c)(1), Nov. 2, 2015, 129 Stat. 632; amended Pub. L. 115–141, div. U, title II, §§ 201(c)(6), 206(h), Mar. 23, 2018, 132 Stat. 1173, 1179.) Editorial Notes PRIOR PROVISIONS A prior section 6231, added Pub. L. 97–248, title IV, § 402(a), Sept. 3, 1982, 96 Stat. 663; amended Pub. L. 98–369, div. A, title VII, § 714(p)(2)(B)–(D), (I), July 18, 1984, 98 Stat. 964, 965; Pub. L. 105–34, title XI, § 1141(b), title XII, §§ 1232(a), 1234(a), Aug. 5, 1997, 111 Stat. 981, 1023, 1024; Pub. L. 105–206, title III, § 3507(a), July 22, 1998, 112 Stat. 772; Pub. L. 107–147, title IV, §§ 416(d)(1)(C), 417(19)(C), Mar. 9, 2002, 116 Stat. 55, 57, de- fined terms for purposes of this subchapter and listed special rules for partnership items, 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, § 206(h)(2), sub- stituted ‘‘Any notice of a final partnership adjust- ment’’ for ‘‘Any notice of a final partnership adjust- ment shall not be mailed earlier than 270 days after the date on which the notice of the proposed partnership adjustment is mailed. Such notices’’ in concluding pro- visions. Subsec. (a)(1). Pub. L. 115–141, § 201(c)(6), substituted ‘‘any partnership-related item for any partnership tax- able year’’ for ‘‘any item of income, gain, loss, deduc- tion, or credit of a partnership for a partnership tax- able year’’. Subsecs. (b) to (d). Pub. L. 115–141, § 206(h)(1), added subsec. (b) and redesignated former subsecs. (b) and (c) as (c) and (d), respectively. Statutory Notes and Related Subsidiaries EFFECTIVE 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 Section applicable to returns filed for partnership taxable years beginning after Dec. 31, 2017, with certain exceptions, see section 1101(g) of Pub. L. 114–74, set out as a note under section 6221 of this title. SPECIAL RULE FOR CERTAIN INTERNATIONAL SATELLITE PARTNERSHIPS Pub. L. 97–248, title IV, § 406, Sept. 3, 1982, 96 Stat. 670, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘[Former] Subchapter C of chapter 63 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to tax treatment of partnership items), section 6031 of such Code (relating to returns of part- nership income), and section 6046A of such Code (relat- ing to returns as to interest in foreign partnerships) shall not apply to the International Telecommuni- cations Satellite Organization, the International Mari- time Satellite Organization, and any organization which is a successor of either of such organizations.’’ § 6232. Assessment, collection, and payment (a) In general Any imputed underpayment shall be assessed and collected in the same manner as if it were a tax imposed for the adjustment year by sub- title A, except that— (1) subchapter B of chapter 63 shall not apply, and (2) in the case of an administrative adjust- ment request to which section 6227(b)(1) ap- plies, the underpayment shall be paid and may be assessed when the request is filed. (b) Limitation on assessment Except as otherwise provided in this subtitle (other than subchapter B of this chapter), no as- sessment of an imputed underpayment may be made (and no levy or proceeding in any court for the collection of any amount resulting from such adjustment may be made, begun or pros- ecuted) before— (1) the close of the 90th day after the day on which a notice of a final partnership adjust- ment was mailed, and (2) if a petition is filed under section 6234 with respect to such notice, the decision of the court has become final. The preceding sentence shall not apply in the case of a specified similar amount (as defined in subsection (f)(2)). (c) Premature action may be enjoined Notwithstanding section 7421(a), any action which violates subsection (b) may be enjoined in the proper court, including the Tax Court. The Tax Court shall have no jurisdiction to enjoin any action under this subsection unless a timely petition has been filed under section 6234 and then only in respect of the adjustments that are the subject of such petition. (d) Exceptions to restrictions on adjustments (1) Adjustments arising out of math or clerical errors (A) In general If the partnership is notified that, on ac- count of a mathematical or clerical error ap- pearing on the partnership return, an adjust- ment to an item is required, rules similar to the rules of paragraphs (1) and (2) of section 6213(b) shall apply to such adjustment.