Kligfeld Holdings, Kligfeld Corporation, Tax Matters Partner - Page 23




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                    taxable year involved” designated as default                      
                    TMP;                                                              
               •    Section 6231(d)(1)(B)--partnership percentage                     
                    interests determined on the basis of profits                      
                    interests “as of the close of the partnership                     
                    taxable year;” and                                                
               •    Section 6226(c)(1)--right to file a petition                      
                    challenging the FPAA limited to partners “in                      
                    such partnership at any time during such                          
                    year * * *.”                                                      
               Kligfeld correctly points out that these provisions don’t              
          seem to contemplate the possibility that this case raises--a                
          situation where the Commissioner issues an FPAA for one taxable             
          year aimed at the treatment of an affected item on a partner’s              
          return for a later year.  Imagine a partnership that in 1990 has            
          50 partners, but due to a great deal of turnover in ownership               
          interests, has 50 completely different partners by 2000.  Were              
          the Commissioner to issue an FPAA for the 1990 taxable year aimed           
          at an affected item on the 2000 tax returns of the current                  
          individual partners, who could challenge it?  Under section                 
          6226(c), only the 1990 partners would be partners “in such                  
          partnership at any time during such year,” but section 6226(d)(1)           
          might deprive them of standing because they would have no                   
          interest in the outcome.21  And if there were no designated TMP,            
          then who would serve by default?  Section 6231(a)(7) says that it           


               21 We assume for the purpose of discussing this hypothetical           
          that all the 1990 partners filed timely, nonfraudulent returns              
          more than three years before disposing of their partnership                 
          interests.                                                                  





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