§6234 Judicial Review of Partnership Adjustment

Summary

A partnership has 90 days after a final adjustment notice is mailed to ask a court to review that year’s adjustment. The partnership can file in the Tax Court, the U.S. district court where its main office is, or the Court of Federal Claims. If the partnership files in a district court or the Court of Federal Claims, it must deposit with the IRS by the filing date the amount the notice says is owed (the imputed underpayment), plus any penalties, additions to tax, and extra amounts as of that date. A court can excuse a small shortfall if the partnership tried in good faith and fixes the shortfall quickly. Money deposited is not treated as a tax payment for the tax code, except under chapter 67. The court can decide all partnership-related items for that year, how to split those items among the partners, and whether any penalties or additions apply. The court’s decision has the same force as a Tax Court decision or a final judgment and can be reviewed the same way. If the court dismisses the case (other than because the notice was rescinded under section 6231(c)), the dismissal is treated as the court saying the notice was correct.