§6234 Judicial review of partnership adjustment

Summary

A partnership has 90 days after a final partnership adjustment notice is mailed to ask a court to redo the adjustment for that taxable year. The partnership can file in the Tax Court, the U.S. district court for the district where the partnership’s main business is, or the Court of Federal Claims. If it sues in a district court or the Court of Federal Claims, it must deposit with the IRS, when it files, the amount of the imputed underpayment plus any penalties, additions, and extra amounts as of that filing date. A court can excuse a small shortfall if the partnership tried in good faith and fixes the gap quickly. Money held under this rule is not treated as a tax payment for this title, except under chapter 67. The chosen court can decide all partnership-related items for that year, how to split those items among the partners, and whether the partnership owes any penalties or additions. The court’s decision counts like a Tax Court decision or a final court judgment and can be reviewed the same way. The decision’s effective date is the date the court issues its order. If the case is dismissed (except for a rescission under section 6231(c)), that dismissal is treated as the court having decided the IRS’s notice was correct.