
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC6223]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                         CHAPTER 63--ASSESSMENT
 
            Subchapter C--Tax Treatment of Partnership Items
 
Sec. 6223. Notice to partners of proceedings


(a) Secretary must give partners notice of beginning and completion of 
        administrative proceedings

    The Secretary shall mail to each partner whose name and address is 
furnished to the Secretary notice of--
        (1) the beginning of an administrative proceeding at the 
    partnership level with respect to a partnership item, and
        (2) the final partnership administrative adjustment resulting 
    from any such proceeding.

A partner shall not be entitled to any notice under this subsection 
unless the Secretary has received (at least 30 days before it is mailed 
to the tax matters partner) sufficient information to enable the 
Secretary to determine that such partner is entitled to such notice and 
to provide such notice to such partner.

(b) Special rules for partnership with more than 100 partners

            (1) Partner with less than 1 percent interest

        Except as provided in paragraph (2), subsection (a) shall not 
    apply to a partner if--
            (A) the partnership has more than 100 partners, and
            (B) the partner has a less than 1 percent interest in the 
        profits of the partnership.

           (2) Secretary must give notice to notice group

        If a group of partners in the aggregate having a 5 percent or 
    more interest in the profits of a partnership so request and 
    designate one of their members to receive the notice, the member so 
    designated shall be treated as a partner to whom subsection (a) 
    applies.

(c) Information base for Secretary's notices, etc.

    For purposes of this subchapter--

                (1) Information on partnership return

        Except as provided in paragraphs (2) and (3), the Secretary 
    shall use the names, addresses, and profits interests shown on the 
    partnership return.

                  (2) Use of additional information

        The Secretary shall use additional information furnished to him 
    by the tax matters partner or any other person in accordance with 
    regulations prescribed by the Secretary.

         (3) Special rule with respect to indirect partners

        If any information furnished to the Secretary under paragraph 
    (1) or (2)--
            (A) shows that a person has a profits interest in the 
        partnership by reason of ownership of an interest through 1 or 
        more pass-thru partners, and
            (B) contains the name, address, and profits interest of such 
        person,

    then the Secretary shall use the name, address, and profits interest 
    of such person with respect to such partnership interest (in lieu of 
    the names, addresses, and profits interests of the pass-thru 
    partners).

(d) Period for mailing notice

               (1) Notice of beginning of proceedings

        The Secretary shall mail the notice specified in paragraph (1) 
    of subsection (a) to each partner entitled to such notice not later 
    than the 120th day before the day on which the notice specified in 
    paragraph (2) of subsection (a) is mailed to the tax matters 
    partner.

      (2) Notice of final partnership administrative adjustment

        The Secretary shall mail the notice specified in paragraph (2) 
    of subsection (a) to each partner entitled to such notice not later 
    than the 60th day after the day on which the notice specified in 
    such paragraph (2) was mailed to the tax matters partner.

(e) Effect of Secretary's failure to provide notice

                    (1) Application of subsection

        (A) In general

            This subsection applies where the Secretary has failed to 
        mail any notice specified in subsection (a) to a partner 
        entitled to such notice within the period specified in 
        subsection (d).

        (B) Special rules for partnerships with more than 100 partners

            For purposes of subparagraph (A), any partner described in 
        paragraph (1) of subsection (b) shall be treated as entitled to 
        notice specified in subsection (a). The Secretary may provide 
        such notice--
                (i) except as provided in clause (ii), by mailing notice 
            to the tax matters partner, or
                (ii) in the case of a member of a notice group which 
            qualified under paragraph (2) of subsection (b), by mailing 
            notice to the partner designated for such purpose by the 
            group.

                      (2) Proceedings finished

        In any case to which this subsection applies, if at the time the 
    Secretary mails the partner notice of the proceeding--
            (A) the period within which a petition for review of a final 
        partnership administrative adjustment under section 6226 may be 
        filed has expired and no such petition has been filed, or
            (B) the decision of a court in an action begun by such a 
        petition has become final,

    the partner may elect to have such adjustment, such decision, or a 
    settlement agreement described in paragraph (2) of section 6224(c) 
    with respect to the partnership taxable year to which the adjustment 
    relates apply to such partner. If the partner does not make an 
    election under the preceding sentence, the partnership items of the 
    partner for the partnership taxable year to which the proceeding 
    relates shall be treated as nonpartnership items.

                   (3) Proceedings still going on

        In any case to which this subsection applies, if paragraph (2) 
    does not apply, the partner shall be a party to the proceeding 
    unless such partner elects--
            (A) to have a settlement agreement described in paragraph 
        (2) of section 6224(c) with respect to the partnership taxable 
        year to which the proceeding relates apply to the partner, or
            (B) to have the partnership items of the partner for the 
        partnership taxable year to which the proceeding relates treated 
        as nonpartnership items.

(f) Only one notice of final partnership administrative adjustment

    If the Secretary mails a notice of final partnership administrative 
adjustment for a partnership taxable year with respect to a partner, the 
Secretary may not mail another such notice to such partner with respect 
to the same taxable year of the same partnership in the absence of a 
showing of fraud, malfeasance, or misrepresentation of a material fact.

(g) Tax matters partner must keep partners informed of proceedings

    To the extent and in the manner provided by regulations, the tax 
matters partner of a partnership shall keep each partner informed of all 
administrative and judicial proceedings for the adjustment at the 
partnership level of partnership items.

(h) Pass-thru partner required to forward notice

                           (1) In general

        If a pass-thru partner receives a notice with respect to a 
    partnership proceeding from the Secretary, the tax matters partner, 
    or another pass-thru partner, the pass-thru partner shall, within 30 
    days of receiving that notice, forward a copy of that notice to the 
    person or persons holding an interest (through the pass-thru 
    partner) in the profits or losses of the partnership for the 
    partnership taxable year to which the notice relates.

                (2) Partnership as pass-thru partner

        In the case of a pass-thru partner which is a partnership, the 
    tax matters partner of such partnership shall be responsible for 
    forwarding copies of the notice to the partners of such partnership.

(Added Pub. L. 97-248, title IV, Sec. 402(a), Sept. 3, 1982, 96 Stat. 
649.)

                  Section Referred to in Other Sections

    This section is referred to in sections 6224, 6229, 6230, 6231 of 
this title.
