§6234 Judicial Review of Partnership Adjustment

Summary

A partnership has 90 days after a final adjustment notice is mailed to ask a court to rework that year’s partnership items. The partnership can go to the Tax Court, the U.S. district court where its main office is, or the Court of Federal Claims. If it files in a district court or the Court of Federal Claims, it must deposit with the IRS, when it files, the imputed underpayment plus any penalties or additions shown in the notice (as of the filing date). The court can accept a good-faith deposit and let a shortfall be fixed quickly. While held by the IRS, that deposit is not treated as a tax payment under the tax code except for chapter 67. The chosen court can decide all partnership items for that year, how they should be split among partners, and whether any penalties apply. The court’s decision counts like a Tax Court decision or a final judgment and can be reviewed on appeal. If the case is dismissed (unless the notice was rescinded under section 6231(c)), the dismissal is treated as the court saying the notice was correct.