All TEFRA partnership motions must be reviewed by the Associate Chief Counsel (P&A), Branch 6 or 7, except as noted below. Certain TEFRA motions may be directly filed with the Tax Court, if they follow the format set forth in Exhibits 35.11.1–62 through 35.11.1–66 for the respective motions. Any deviation from the format of the appropriate exhibit will require review of the motion by the Associate Chief Counsel (P&A), Branch 6 or 7. Those motions that may be directly filed are:

In addition to the sample motions referenced above, CCDM 35.3.7.3 discusses TEFRA jurisdictional motions in more detail and provides guidance on what facts need to be alleged in the motions. All other TEFRA motions not referenced above must be reviewed by the Associate Chief Counsel (P&A), Branch 6 or 7; (e.g., any motion to dismiss for lack of jurisdiction because the notice partner filed within the 90-day period, or affected items in the FPAA). If there is any question as to the validity of a petition filed by the TMP, or the validity of a prior filed petition, motions to dismiss must be submitted to the Associate Chief Counsel (P&A), Branch 6 or 7, for review. Exhibit 35.11.1–1 (Tax Court Documents Requiring Associate Office Review).

All BBA partnership motions must be reviewed by the Associate Chief Counsel (P&A), Branch 6 or 7, except as noted below. These BBA documents may be directly filed with the Tax Court:

In addition to the sample documents referenced above, CCDM 35.3.7.4 discusses BBA jurisdictional motions in more detail and provides guidance on what facts need to be alleged in the motions. All other BBA motions not referenced above must be reviewed by the Associate Chief Counsel (P&A), Branch 6 or 7. If there is any question as to the validity of petition filed by the partnership representative, or the validity of a prior-filed petition, motions to dismiss must be submitted to Associate Chief Counsel (P&A), Branch 6 or 7. Exhibit 35.11.1-1 (Tax Court Documents Requiring Associate Office Review).

The procedure contained in sections 6221 through 6234 governs audit procedures relating to partnership and affected items. Section 6225 precludes normal deficiency proceedings with reference to TEFRA partnership adjustments. Any statutory notice of deficiency which contains only partnership items is invalid in its entirety because it attempts to determine a deficiency for partnership items other than through procedures prescribed by sections 6221through 6233. Exhibit 35.11.1–63.

Where an invalid statutory notice of deficiency is issued, i.e., a notice containing only partnership item or affected item adjustments, respondent should file a motion to dismiss for lack of jurisdiction. The motion should state that no valid statutory notice of deficiency under section 6212 was issued and that the notice is invalid and prohibited by section 6225. The motion should further indicate that: (a) the items on the statutory notice are partnership items; (b) the statutory notice is invalid in its entirety insofar as it attempts to determine a deficiency for partnership items or affected items other than through the procedures prescribed by sections 6221 through 6234; and (c) the motion to dismiss for lack of jurisdiction is without prejudice to the right of the respondent to proceed under sections 6221 through 6234 to deal with the (name of TEFRA partnership), as appropriate, including the issuance of a notice of final partnership administrative adjustment under section 6223(a)(2) should such action be appropriate and timely. The motion should also allege sufficient facts and provide sufficient documentation for the court to make an independent determination that the items in question arise from a TEFRA partnership. The motion should also state why the partnership does not fall within the small partnership exception to TEFRA: i.e., it had more than ten partners at any point during the taxable year or it had a pass-thru or nonresident alien as a partner. Section 6231(a)(1)(B)(i). If a notice of beginning of administrative proceeding or final partnership administrative adjustment has been issued to the partnership, these facts and the respective dates of issuance should be stated and a copy of the notice attached as an exhibit. If a petition has been filed with respect to a notice of final partnership administrative adjustment, this should also be noted. Exhibit 35.11.1–63.

If a statutory notice of deficiency is issued which contains adjustments to partnership or affected items and nonpartnership items, the entire statutory notice would not be invalid. In such a situation, to preserve the validity of the statutory notice with respect to the nonpartnership item adjustments, the respondent should file a motion to dismiss for lack of jurisdiction and to strike. The motion to dismiss and to strike should reference the portion of the adjustments and pleadings pertaining to (and only to) the partnership. The motion should state that the statutory notice is valid, as nonpartnership items were adjusted and a deficiency was determined with respect to such nonpartnership items, but insofar as adjustments to partnership items or affected items were determined, the notice is invalid and prohibited by section 6225. The motion should also indicate that: the statutory notice of deficiency is invalid only insofar as it attempts to determine a deficiency for partnership items or affected items other than through the procedures prescribed by sections 6221 through 6234, and the notice is otherwise valid. Additional facts should be alleged and exhibits attached as outlined in the preceding paragraph. Exhibit 35.11.1–64.

In a TEFRA proceeding, the court only has jurisdiction over partnership items pursuant to section 6226(f). Partnership items are items required to be taken into account for the partnership’s taxable year under any provision of subtitle A to the extent regulations provide that such item is more appropriately determined at the partnership level than at the partner level. Section 6231(a)(3). If nonpartnership items, such as penalties or additions to tax (other than on adjustments to partnership items), are raised in a petition with respect to a notice of Final Partnership Administrative Audit, a motion to dismiss for lack of jurisdiction and to strike must be filed. Exhibit 35.11.1–65.

Commencement of Action — Section 6226(a) and (b). Upon receipt of a petition or complaint in a partnership action, the Field attorney must determine whether other actions have been filed and, if more than one petition or complaint has been filed, which one must be dismissed. A list of petitions filed with respect to a partnership taxable year is available through TLCATS. The Tax Court’s website also should be checked. The attorney with responsibility over the duplicate petition must contact the attorney with the lead case to ensure that the lead case was correctly determined and that there are no jurisdictional defects with respect to the lead case. The Field attorney with responsibility over a case to be dismissed shall prepare a motion to dismiss. This includes motions to dismiss duplicate petitions if there is any question as to the validity of the first petition.

Priority of Actions. If the TMP files a petition during the period provided for under section 6226(a), then all petitions filed during the period provided for under section 6226(b) must be dismissed for lack of jurisdiction. The motion to dismiss should state (a) the date of issuance of the notice of final partnership administrative adjustment and that a petition was filed by the TMP within 90 days of the issuance of the notice of FPAA, giving the date and docket number of the petition filed by the TMP; (b) that a petition may be filed by a notice partner pursuant to section 6226(b)(1) only if the tax matters partner has not filed a petition pursuant to section 6226(a); (c) that the court lacks jurisdiction over the notice partner petition pursuant to section 6226(b)(1). SeeExhibit 35.11.1–61. The attorney with responsibility over the case to be dismissed must contact the attorney with responsibility over the TMP case to ensure that there are no jurisdictional defects with respect to the TMP petition. If there is any question as to the validity of the petition by the TMP, the motion to dismiss must be submitted for prereview to the Associate Chief Counsel (P&A), Branch 6 or 7.

Priority of Actions When More Than One Petition is Filed by Partner with Standing Pursuant to Section 6226(b)(1) –– Section 6226(b)(2)–(4). A petition may be filed pursuant to section 6226(b)(1) by a notice partner or five-percent group, only if the TMP does not file a petition pursuant to section 6226(a) in the first 90 days after a notice of FPAA is issued to the TMP. If the TMP does not file a petition during this initial period, then the first action filed in the Tax Court during the 60-day period provided by section 6226(b) will establish jurisdiction, or if no petition is filed with the Tax Court, the first action filed in either the district court or Court of Federal Claims will go forward. All other actions shall be dismissed. The Field attorney assigned to a case which must be dismissed shall file a motion to dismiss his case for lack of jurisdiction pursuant to sections 6226(b)(2) and 6226(b)(4). The motion must inform the court of the case which will go forward stating that it was the first case to be filed in the Tax Court pursuant to section 6226(b)(1). The motion should further state that the first case brought in the Tax Court shall go forward pursuant to section 6226(b)(2) and all subsequent petitions filed during the period provided by section 6226(b) must be dismissed pursuant to section 6226(b)(4). SeeExhibit 35.11.1–62. The attorney with responsibility over the case to be dismissed must coordinate with the attorney with responsibility over the lead case. Motions to dismiss duplicate petitions, if there is any question as to the validity of the case to go forward, must be reviewed by the Associate Chief Counsel (P&A), Branch 6 or 7.

Untimely petitions. Upon receipt of a petition in a partnership action, the Field attorney must first determine if the petition was timely filed during the periods provided for under sections 6226(a) or 6226(b). If the petition has been untimely filed, then a motion to dismiss for lack of jurisdiction must be filed. Once this determination is made, the Field attorney must promptly notify the Examination Support Unit in the key case Service Center in writing that the petition was untimely filed and that a prompt assessment of deficiencies due to adjustments of partnership items must be made unless some other timely petition was filed. This is because the suspension provision of section 6229(d) will toll the period of limitations until the court decision becomes final only where a petition has been timely filed by the Tax Matters Partner, a notice partner, or a 5% group. In this respect the statute suspension provisions under TEFRA do not parallel section 6503(a)(1). Section 6229(d) provides that if a notice of a Final Partnership Administrative Adjustment is mailed to the TMP, the running of the period of limitations is suspended (1) for the period during which an action may be brought under section 6226 (and, if an action with respect to such administrative adjustment is brought during such period, until the decision of the court in such action becomes final), and (2) for one year thereafter. Therefore, where a petition is untimely filed and there are no other timely filed petitions with regard to that administrative adjustment, the one year period of section 6229(d)(2) begins to run upon the default of the FPAA. Similarly, section 6225(a) bars assessment of tax attributable to partnership items for 150 days after mailing the FPAA to the TMP and, if a proceeding is begun in the Tax Court during such 150-day period, until the decision of the court becomes final. This means that if an untimely petition is filed, the prohibition on assessment under section 6225 is lifted after the 150 day period and the one year suspension period of section 6229(d)(2) will expire one year after expiration of the period for petitioning cases, or one year after the decision becomes final in timely petitioned cases. Therefore, the written notification to the appropriate Examination Support Unit must identify when the one year suspension period under section 6229(d) begins or ends. The adjustments reflected on the FPAA should be used as a basis for assessing all investors.

For taxable years beginning in 2018 when BBA applies, the procedures contained in sections 6221 through 6241 govern audit procedures relating to partnership-related items. Partnerships may elect-in these procedures for any partnership taxable year beginning after November 2, 2015 and before January 1, 2018 in the manner prescribed by Treas. Reg. § 301.9100-22.

Under section 6223, only a Partnership Representative (PR) has authority to act on behalf of the partnership, including in BBA proceedings. A PR may be designated by the partnership or, if such designation by the partnership is not in effect, by the Secretary. The partnership and all partners to the partnership are bound by final decision made in BBA proceeding by a properly designated PR. The Tax Court promulgated Rule 255.6 governing the identification and removal of a PR before the court.

The court only has jurisdiction over partnership-related items for the partnership taxable year to which the notice of final partnership adjustment relates pursuant section 6234(c). A partnership-related item is any item or amount shown or required to be shown on the partnership’s return or required to be maintained in the partnership’s books and records that is relevant to determining the Chapter 1 liability of any person. Treas. Reg. § 301.6241-1(6)(ii). Any adjustment made to a partnership-related item must be made at the partnership level. Section 6221(a).

Filing by Partnership Representative pusuant to section 6234(a). the PR, within 90 days after the mailing of the notice of final partnership adjustment, may file a petition for readjustment of partnership-related items in the Tax Court, the district court in which the partnership’s principal place of business is located, or the Court of Federal Claims. Note that the filing period may actually be longer than 90 days if the 90th day falls on a Saturday, Sunday or legal holiday in the District of Columbia. Section 7503. Only the PR may file a petition for judicial review. If any person other than the PR files a petition in this 90-day period, the Field attorney should first confirm whether the person who filed the petition is the PR, and, if not, the Field attorney should prepare a motion to dismiss the action for lack of jurisdiction under section 6234(a) and section 6223. Branches 6 and 7 of the Associate Chief Counsel (P&A) can assist with any necessary coordination on BBA issues.

Untimely petitions. Upon receipt of a petition in a BBA action, the Field attorney must first determine if the petition was timely filed during the period prescribed by section 6234(a), taking into account if the statute of limitations has been tolled or extended by section 6241(6)(B) or for any other appropriate reason. If the petition has been untimely filed, then a motion to dismiss for lack of jurisdiction must be filed.