§6221 Determination at partnership level

Summary

Partnerships must have any audit changes, related taxes, and penalties handled at the partnership level unless the rules say otherwise. A partnership can choose not to follow that partnership-level rule for a tax year if it meets several conditions. It must make the choice on a timely tax return and give the IRS each partner’s name and taxpayer ID as required. The partnership must have to give 100 or fewer information statements for that year. All partners must be either individuals, C corporations (including foreign entities treated as C corporations), S corporations, or estates. The partnership must tell each partner about the choice. If a partner is an S corporation, the partnership must also list the people for whom that S corporation must give statements, and those statements count toward the 100 limit. The Treasury can allow other ID options for foreign partners and may make similar rules for other partner types.