Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 39331 

(2) For airplanes equipped with a 4-lugs 

engine (LH or RH), and on which, prior to the 

effective date of this AD, an aft engine mount 

assembly identified as ‘‘New P/N’’ in figure 

1 to paragraphs (g)(1), (h), (i), (j), (k), and (l) 

of this AD has been installed on the affected 

engine pylon (LH or RH), or on which the aft 

engine part assembly has been modified as 

specified in paragraph (h) of this AD: Within 

30 days after the effective date of this AD, 

obtain repair instructions using a method 

approved by the Manager, International 

Section, Transport Standards Branch, FAA; 

or the European Aviation Safety Agency 

(EASA); or Airbus’s EASA Design 

Organization Approval (DOA), and 

accomplish those instructions accordingly. If 

approved by the DOA, the approval must 

include the DOA-authorized signature. 

(m) Terminating Action and Method of 

Compliance 

(1) Modification of an airplane as required 

by paragraph (h) of this AD, or as specified 

in paragraph (i) of this AD, constitutes 

terminating action for the repetitive detailed 

inspections required by paragraph (l) of AD 

2016–14–09 for that airplane. 

(2) Modification of an airplane as required 

by paragraph (h) of this AD, or as specified 

in paragraph (i) of this AD, is a method of 

compliance with the requirements of 

paragraph (g) of AD 2017–04–10 for that 

airplane. 

(n) Credit for Previous Actions 

This paragraph provides credit for the 

actions specified in paragraph (h) of this AD, 

if those actions were performed before the 

effective date of this AD using Airbus Service 

Bulletin A320–71–1071, dated November 8, 

2016, and the actions were not performed on 

4-lugs engines. 

(o) Other FAA AD Provisions 

The following provisions also apply to this 

AD: 

(1) Alternative Methods of Compliance 

(AMOCs): The Manager, International 

Section, Transport Standards Branch, FAA, 

has the authority to approve AMOCs for this 

AD, if requested using the procedures found 

in 14 CFR 39.19. In accordance with 14 CFR 

39.19, send your request to your principal 

inspector or local Flight Standards District 

Office, as appropriate. If sending information 

directly to the International Section, send it 

to the attention of the person identified in 

paragraph (q)(2) of this AD. Information may 

be emailed to: 9-ANM-116-AMOCREQUESTS@faa.gov. Before using any 

approved AMOC, notify your appropriate 

principal inspector, or lacking a principal 

inspector, the manager of the local flight 

standards district office/certificate holding 

district office. 

(2) Contacting the Manufacturer: For any 

requirement in this AD to obtain corrective 

actions from a manufacturer, the action must 

be accomplished using a method approved 

by the Manager, International Section, 

Transport Standards Branch, FAA; or EASA; 

or Airbus SAS’ EASA DOA. If approved by 

the DOA, the approval must include the 

DOA-authorized signature. 

(3) Required for Compliance (RC): If any 

service information contains procedures or 

tests that are identified as RC, those 

procedures and tests must be done to comply 

with this AD; any procedures or tests that are 

not identified as RC are recommended. Those 

procedures and tests that are not identified 

as RC may be deviated from using accepted 

methods in accordance with the operator’s 

maintenance or inspection program without 

obtaining approval of an AMOC, provided 

the procedures and tests identified as RC can 

be done and the airplane can be put back in 

an airworthy condition. Any substitutions or 

changes to procedures or tests identified as 

RC require approval of an AMOC. 

(p) Special Flight Permits 

Special flight permits, as described in 

Section 21.197 and Section 21.199 of the 

Federal Aviation Regulations (14 CFR 21.197 

and 21.199), are not allowed. 

(q) Related Information 

(1) Refer to Mandatory Continuing 

Airworthiness Information (MCAI) EASA AD 

2017–0251 dated December 15, 2017, for 

related information. This MCAI may be 

found in the AD docket on the internet at 

http://www.regulations.gov by searching for 

and locating Docket No. FAA–2018–0165. 

(2) For more information about this AD, 

contact Sanjay Ralhan, Aerospace Engineer, 

International Section, Transport Standards 

Branch, FAA, 2200 South 216th St., Des 

Moines, WA 98198; telephone and fax 206– 

231–3223. 

(3) Service information identified in this 

AD that is not incorporated by reference is 

available at the addresses specified in 

paragraphs (r)(3) and (r)(5) of this AD. 

(r) Material Incorporated by Reference 

(1) The Director of the Federal Register 

approved the incorporation by reference 

(IBR) of the service information listed in this 

paragraph under 5 U.S.C. 552(a) and 1 CFR 

part 51. 

(2) You must use this service information 

as applicable to do the actions required by 

this AD, unless this AD specifies otherwise. 

(i) Airbus Service Bulletin A320–71–1071, 

Revision 01, dated October 17, 2017. 

(ii) Goodrich Aerostructures Service 

Bulletin RA32071–164, Revision 1, dated 

July 19, 2017. 

(3) For Airbus SAS service information 

identified in this AD, contact Airbus SAS, 

Airworthiness Office—EIAS, Rond-Point 

Emile Dewoitine No: 2, 31700 Blagnac Cedex, 

France; telephone +33 5 61 93 36 96; fax +33 

5 61 93 44 51; email account.airworth-eas@

airbus.com; internet http://www.airbus.com. 

(4) For Goodrich Aerospace service 

information identified in this AD, contact 

Goodrich Corporation, Aerostructures, 850 

Lagoon Drive, Chula Vista, CA 91910–2098; 

phone: 619–691–2719; email: jan.lewis@

goodrich.com; internet: http://

www.goodrich.com/TechPubs. 

(5) You may view this service information 

at the FAA, Transport Standards Branch, 

2200 South 216th St., Des Moines, WA. For 

information on the availability of this 

material at the FAA, call 206–231–3195. 

(6) You may view this service information 

that is incorporated by reference at the 

National Archives and Records 

Administration (NARA). For information on 

the availability of this material at NARA, call 

202–741–6030, or go to: http://

www.archives.gov/federal-register/cfr/ibrlocations.html. 

Issued in Des Moines, Washington, on July 

23, 2018. 

James Cashdollar, 

Acting Director, System Oversight Division, 

Aircraft Certification Service. 

[FR Doc. 2018–16504 Filed 8–8–18; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 301 

[TD 9839] 

RIN 1545–BN41 

Partnership Representative Under the 

Centralized Partnership Audit Regime 

and Election To Apply the Centralized 

Partnership Audit Regime 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulation and removal of 

temporary regulations. 

SUMMARY: This document contains final 

regulations regarding the designation 

and authority of the partnership 

representative under the centralized 

partnership audit regime, which was 

enacted into law on November 2, 2015 

by section 1101 of the Bipartisan Budget 

Act of 2015 (BBA). These final 

regulations affect partnerships for 

taxable years beginning after December 

31, 2017. This document also contains 

final regulations and removes temporary 

regulations regarding the election to 

apply the centralized partnership audit 

regime to partnership taxable years 

beginning after November 2, 2015 and 

before January 1, 2018 under section 

1101(g)(4) of the BBA. These final 

regulations affect partnerships for 

taxable years beginning after November 

2, 2015 and before January 1, 2018. 

DATES: 

Effective date: These regulations are 

effective on August 9, 2018. 

Applicability Date: For dates of 

applicability, see §§ 301.6223–1(h), 

301.6223–2(f), and 301.9100–22(e). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the regulations under 

§§ 301.6223–1 and 301.6223–2, Joy E. 

Gerdy Zogby of the Office of Associate 

Chief Counsel (Procedure and 

Administration), (202) 317–4927; 

concerning § 301.9100–22, Jennifer M. 

Black of the Office of Associate Chief 

Counsel (Procedure and 


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39332 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 

Administration), (202) 317–6834 (not 

toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

This document contains final 

regulations to amend the Procedure and 

Administration Regulations (26 CFR 

part 301) under Subpart—Tax 

Treatment of Partnership Items to 

implement the rules for the partnership 

representative under the centralized 

partnership audit regime enacted by 

section 1101 of the BBA, Public Law 

114–74. Section 1101 of the BBA was 

amended on December 18, 2015, by the 

Protecting Americans from Tax Hikes 

Act of 2015, Public Law 114–113, and 

on March 23, 2018 by the Tax Technical 

Corrections Act of 2018, which was 

enacted into law as part of the 

Consolidated Appropriations Act of 

2018, Public Law 115–141. Section 

301.6223–1 provides the rules regarding 

the designation of the partnership 

representative, § 301.6223–2 provides 

the rules regarding the authority of the 

partnership representative, and 

§ 301.9100–22 provides the rules for 

making the election under section 

1101(g)(4) of the BBA with respect to 

returns filed for partnership taxable 

years beginning after November 2, 2015 

and before January 1, 2018. 

On August 5, 2016, the Treasury 

Department and the IRS published in 

the Federal Register (81 FR 51795) 

temporary regulations (TD 9780) 

regarding the time, form, and manner 

for making an election to apply the 

centralized partnership audit regime to 

partnership taxable years beginning 

after November 2, 2015 and before 

January 1, 2018. On the same day, the 

Treasury Department and the IRS 

published in the Federal Register (81 

FR 51835) a notice of proposed 

rulemaking (REG–105005–16) crossreferencing the temporary regulations. 

No comments were received in response 

to the proposed regulations, and no 

hearing was requested or held. 

On June 14, 2017, the Treasury 

Department and the IRS published in 

the Federal Register (82 FR 27334) a 

notice of proposed rulemaking (REG– 

136118–15) regarding a number of 

provisions of the centralized 

partnership audit regime, including 

section 6223, relating to the partnership 

representative (June 14 NPRM). A 

public hearing regarding the proposed 

regulations was held on September 18, 

2017. The Treasury Department and the 

IRS also received written public 

comments in response to the proposed 

regulations, including comments 

regarding the partnership representative 

under section 6223. 

On November 30, 2017, the Treasury 

Department and the IRS published in 

the Federal Register (82 FR 56765) a 

notice of proposed rulemaking (REG– 

119337–17) regarding international 

rules under the centralized partnership 

audit regime. On December 19, 2017, 

the Treasury Department and the IRS 

published in the Federal Register (82 

FR 27071) a notice of proposed 

rulemaking (REG–120232–17) regarding 

certain procedural rules under the 

centralized partnership audit regime, 

including proposed § 301.6231–1 

regarding notices that are required to be 

mailed to partnerships (December 19 

NPRM). On January 2, 2018, the 

Treasury Department and the IRS 

published in the Federal Register (82 

FR 28398) final regulations for electing 

out of the partnership audit regime. On 

February 2, 2018, the Treasury 

Department and the IRS published in 

the Federal Register (83 FR 4868) a 

notice of proposed rulemaking (REG– 

118067–17) regarding rules for adjusting 

tax attributes under the centralized 

partnership audit regime. 

After careful consideration of all 

written public comments and 

statements made during the public 

hearing relating to section 6223, the 

portions of the June 14 NPRM relating 

to section 6223 are adopted as amended 

by this Treasury Decision. These 

amendments are discussed in the next 

section. Examples were revised to 

conform to the amendments discussed 

in the next section, and clarifying and 

editorial revisions were also made. The 

Treasury Department and the IRS 

received no comments with respect to 

proposed § 301.9100–22 and made no 

substantive revisions to the proposed 

regulations. Accordingly, the final 

regulations adopt the proposed 

regulations without any substantive 

change. Minor editorial changes were 

made. The temporary regulations are 

removed. 

Summary of Comments and 

Explanation of Revisions 

1. Partnership Representative 

In response to the June 14 NPRM, the 

Treasury Department and the IRS 

received 33 written comments, and five 

statements were provided at the public 

hearing. All comments (both written 

and provided orally at the public 

hearing) were considered, and written 

comments are available for public 

inspection at www.regulations.gov or 

upon request. This preamble addresses 

only the comments or portions of 

comments relating to the proposed 

regulations under section 6223, which 

are the proposed regulations from the 

June 14 NPRM being finalized in this 

Treasury Decision. Comments, or any 

portion of a comment, that relate to 

other aspects of the proposed 

regulations in the June 14 NPRM that 

have not yet been finalized will be 

addressed when final regulations 

regarding those provisions are 

published. The comments relating to the 

proposed regulations under section 

6223 cover a broad range of topics, 

including eligibility to serve as the 

partnership representative, designating 

and changing a partnership 

representative, and the binding effect 

and authority of the partnership 

representative. These comments were 

considered and revisions to the 

regulations were made in response to 

the comments. 

A. Eligibility To Serve as the 

Partnership Representative 

Proposed § 301.6223–1(b)(1) provided 

that a partnership may designate any 

person that has a substantial presence in 

the United States and that has the 

capacity to act to be the partnership 

representative. If an entity is designated 

as the partnership representative, the 

partnership must appoint a designated 

individual to act on the entity’s behalf. 

See proposed § 301.6223–1(b)(2), (3), 

and (4). 

One comment recommended that 

§ 301.6223–1(b)(1) explicitly provide 

that a disregarded entity can serve as the 

partnership representative. This 

comment has been adopted. Any person 

as defined in section 7701(a)(1), 

including an entity, can serve as the 

partnership representative provided that 

person meets the requirements of 

§ 301.6223–1(b). Therefore, § 301.6223– 

1(b)(1) has been revised to clarify that a 

disregarded entity can be a partnership 

representative. Because a disregarded 

entity is not an individual and is an 

entity partnership representative, the 

partnership must appoint a designated 

individual to act on behalf of the 

disregarded entity in accordance with 

§ 301.6223–1(b)(3). In addition, both the 

disregarded entity and the designated 

individual must have substantial 

presence as described in § 301.6223– 

1(b)(2). 

Section 301.6223–1(b)(1) has also 

been revised to clarify that a partnership 

may designate itself as its own 

partnership representative. The rules 

regarding eligibility to serve as a 

partnership representative are designed 

to permit the partnership to designate 

the person it believes is most 

appropriate to serve as partnership 

representative, provided that person 

meets the requirements of § 301.6223– 

1(b)(2) (substantial presence) and 


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Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 39333 

§ 301.6223–1(b)(3) (designated 

individual). Therefore, a partnership 

may serve as its own partnership 

representative if the partnership has 

substantial presence in the United 

States and also appoints a designated 

individual that has a substantial 

presence in the United States to act on 

the partnership’s behalf in the 

partnership’s role as partnership 

representative. 

One comment recommended that the 

regulations confirm that, in the case of 

an entity designated as partnership 

representative, the designated 

individual does not have to be an 

employee of that entity. Nothing in the 

regulations requires that the designated 

individual be an employee of the entity 

partnership representative. As 

explained in part 4.F. of the preamble to 

the June 14 NPRM, an entity with no 

employees is permitted to be the 

partnership representative provided the 

partnership appoints a designated 

individual to act on behalf of that entity 

and both the entity and the designated 

individual have substantial presence in 

the United States. Because the plain 

language of the regulation does not 

require the designated individual to be 

an employee of the entity partnership 

representative, no clarification is 

necessary and the comment was not 

adopted. 

Another comment suggested that a 

partnership should not be required to 

appoint a designated individual to act 

for an entity partnership representative 

until the IRS issues a notice of 

administrative proceeding (NAP) or the 

partnership files a valid administrative 

adjustment request (AAR) under section 

6227. This comment was not adopted. 

The purpose of the designated 

individual requirement is to have an 

individual identified who can act on 

behalf of the entity partnership 

representative prior to the beginning of 

an administrative proceeding under 

subchapter C of chapter 63 

(administrative proceeding). If no 

designated individual is appointed and 

the IRS initiates an administrative 

proceeding, neither the partnership nor 

the IRS will know who has the authority 

to act on behalf of the entity partnership 

representative. This could delay the 

beginning of the proceeding and 

consequently slow down the 

administrative proceeding. 

As explained in part 2.D. of the 

preamble to the June 14 NPRM, these 

types of delays frequently occurred 

under TEFRA. Under TEFRA, 

partnerships and the IRS often spent a 

significant amount of time establishing 

that a person designated as the tax 

matters partner (TMP) was qualified to 

be the TMP or, in the case of an entity 

TMP, identifying and locating an 

individual to act on the entity’s behalf. 

Also as explained in part 2.D. of the 

preamble to the June 14 NPRM, the 

introduction of the partnership 

representative concept under the 

centralized partnership audit regime 

was intended to address the 

shortcomings of the TMP rules. 

Accordingly, the proposed regulations 

required the partnership to identify and 

appoint a designated individual prior to 

the start of an administrative proceeding 

to avoid a delay related to locating and 

confirming the identity of an individual 

to act on behalf of an entity partnership 

representative. With that objective in 

mind, the final regulations maintain the 

rule that in the case of an entity 

partnership representative, the 

partnership must appoint a designated 

individual at the time the partnership 

representative is designated. 

Another comment suggested that the 

entity partnership representative itself, 

rather than the partnership, should 

appoint the designated individual. The 

partnership makes the initial 

designation of the partnership 

representative on the partnership’s 

return. When an entity is chosen, the 

partnership must appoint a designated 

individual to act on behalf of the entity 

partnership representative. See 

§ 301.6223–1(c)(2). While this rule 

requires that the partnership appoint the 

designated individual, nothing in the 

regulations precludes the entity 

partnership representative from 

identifying who the designated 

individual should be and 

communicating that decision to the 

partnership. Ultimately, however, the 

partnership must determine who will be 

the partnership representative. 

Determining who will be the designated 

individual to act on behalf of an entity 

partnership representative is part of that 

determination. Therefore, the final 

regulations retain the rule that the 

partnership must appoint the designated 

individual on its partnership return for 

the relevant taxable year. 

This rule ensures that designation of 

the entity partnership representative 

and appointment of the designated 

individual occur simultaneously on the 

partnership return with the result that it 

will be clear to both the partnership and 

the IRS at the time the partnership 

return is filed who has the authority to 

act on behalf of the partnership for the 

taxable year for which the return is filed 

for purposes of the centralized 

partnership audit regime. As discussed 

previously in this section of the 

preamble, under TEFRA, the IRS spent 

significant time and resources 

determining who was the TMP. If that 

TMP was an entity, the IRS and 

taxpayers spent additional time and 

resources determining who could act on 

behalf of the entity TMP under state 

law. Moreover, in cases where state law 

permitted an entity to act on behalf of 

an entity TMP, the IRS and the 

partnership had to identify an 

individual who could act on behalf of 

that entity to determine someone who 

could ultimately act on behalf of the 

entity TMP. The rule under § 301.6223– 

1(c)(2) allows the IRS and the 

partnership to readily identify who can 

act on behalf of the partnership 

representative without having to inquire 

into who has the state law authority to 

act on behalf of the entity partnership 

representative. Because the partnership 

makes the designated individual 

appointment under the final regulations, 

the rule eliminates the time spent 

determining who can act for the 

partnership. 

This rule is also necessary because 

under the centralized partnership audit 

regime an entity partnership 

representative can only act through a 

designated individual. To achieve this, 

the partnership must appoint the 

designated individual for the entity 

partnership representative to take action 

under the centralized partnership audit 

regime. Prior to the appointment of a 

designated individual, the entity 

partnership representative does not 

have the ability to act under the 

centralized partnership audit regime. 

Accordingly, the comment 

recommending the partnership 

representative make the designated 

individual appointment was not 

adopted, and § 301.6223–1(b)(3)(ii) has 

been modified to clarify that the 

partnership must appoint the designated 

individual. 

i. Substantial Presence 

Section 6223(a) provides that a 

partnership representative must have a 

substantial presence in the United 

States. Proposed § 301.6223–1(b)(2) 

provided that a person has substantial 

presence in the United States for 

purposes of section 6223 if the person 

is able to meet in person with the IRS 

in the United States at a reasonable time 

and place, has a United States street 

address and telephone number where 

the person can be reached during 

normal business hours, and has a 

United States taxpayer identification 

number (TIN). Several comments 

suggested that the first two criteria for 

substantial presence were too vague and 

recommended clarification of what is 

considered reasonable with respect to 

the time and place for meetings between 


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39334 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 

the partnership representative and the 

IRS and whether the reference to normal 

business hours is determined based on 

the IRS’s business hours or based on the 

partnership’s business hours. 

Section 301.6223–1(b)(2) is designed 

to allow the partnership and the IRS 

maximum flexibility to determine 

mutually convenient times to meet, to 

schedule phone calls, and to share 

information, while at the same time 

ensuring that the partnership and its 

books and records are available to the 

IRS during the administrative 

proceeding. Because what constitutes a 

reasonable time and place depends on 

the facts and circumstances, providing 

specific rules by regulation applicable to 

every circumstance that could arise in 

an administrative proceeding is not 

feasible and, even if it were, doing so 

would interfere with rather than 

facilitate a productive environment for 

the administrative proceeding. There are 

existing regulations relating to the 

reasonable time and place for an 

examination in § 301.7605–1 that are 

applicable to the centralized partnership 

audit regime. Section 301.7605–1(a) 

states: ‘‘The time and place of 

examination . . . are to be fixed by an 

officer or employee of the Internal 

Revenue Service, and officers and 

employees are to endeavor to schedule 

a time and place that are reasonable 

under the circumstances.’’ To address 

the comment, the regulations under 

§ 301.6223–1(b)(2) have been clarified to 

include a cross-reference to these 

provisions. 

With respect to the comment 

regarding the meaning of ‘‘normal 

business hours,’’ the Treasury 

Department and the IRS agree that this 

terminology is confusing. In addition, 

cross-referencing the rules for the time 

and place of examination under 

§ 301.7605–1 makes this term 

unnecessary. Therefore, the final 

regulations remove the reference in 

§ 301.6223–1(b)(2)(ii) to normal 

business hours. The partnership 

representative still must have a 

telephone number with a United States 

area code, but the reference to normal 

business hours has been removed to 

avoid confusion regarding what 

constitutes normal business hours. 

The Treasury Department and the IRS 

also revised the phrase in § 301.6223– 

1(b)(2)(i)—‘‘The person is available to 

meet in person with the IRS’’—to read— 

‘‘The person makes themselves available 

to meet in person with the IRS.’’ This 

change was made to distinguish 

between a partnership representative 

who is generally available to meet and 

works with the IRS to facilitate 

communications and a partnership 

representative who is generally 

available but refuses to meet with the 

IRS. Examples have also been added 

under § 301.6223–1(b)(4) to illustrate 

this clarification. 

Another comment recommended that 

regulations under proposed § 301.6223– 

1(b)(2) establish a ‘‘safe harbor’’ for 

substantial presence that would allow 

the partnership to designate a location 

in the United States for purposes of 

communications between the 

partnership representative and the IRS, 

similar to how businesses designate a 

registered agent and an address for 

accepting service of process. Section 

301.6223–1(b)(2)(ii) requires the 

partnership to provide a United States 

street address and phone number where 

the partnership representative can be 

reached by United States mail and 

telephone. This rule already allows the 

partnership to designate a location 

within the United States for 

communications between the 

partnership representative and the IRS, 

including receipt of formal documents 

from the IRS. However, in addition to 

having a United States street address 

and telephone, a partnership 

representative must also make 

themselves available to meet in person 

with the IRS. As discussed in part 2.D 

of the preamble to the June 14 NPRM, 

the purpose of the substantial presence 

requirement is to ‘‘ensure that the 

person selected to represent the 

partnership will be available to the IRS 

in the United States when the IRS seeks 

to communicate or meet with the 

representative.’’ Because the partnership 

representative must make themselves 

available to meet with the IRS, the 

partnership representative may have 

any telephone number with a United 

States area code and a street address in 

any location in the United States, 

provided the telephone number and 

street address allow the IRS to contact 

the partnership representative. 

Consequently, an explicit ‘‘safe harbor’’ 

for substantial presence is unnecessary, 

and the comment has not been adopted. 

ii. Capacity To Act 

One of the components of eligibility 

to serve as a partnership representative 

or designated individual under the 

proposed regulations was the capacity 

to act. Proposed § 301.6223–1(b)(4) 

described five specific events that cause 

a person to lose the capacity to act for 

purposes of section 6223 and included 

a catch-all provision for any unforeseen 

circumstances in which the IRS 

reasonably determined a person may no 

longer have the capacity to act. If a 

partnership representative lost the 

capacity to act under proposed 

§ 301.6223–1(b)(4), the IRS could 

determine that the designation of the 

partnership representative or 

appointment of a designated individual 

was not in effect. See proposed 

§ 301.6223–1(f). Additionally, where all 

general partners lost the capacity to act, 

a partner other than a general partner 

could sign a revocation of the 

partnership representative. See 

proposed § 301.6223–1(e). 

In response to the capacity-to-act 

requirements in the proposed 

regulations, one comment 

recommended that the list of 

circumstances under proposed 

§ 301.6223–1(b)(4) be expanded to 

include other specific situations such as 

when the person has been convicted of 

a felony or a crime that involves 

dishonesty or breach of trust, when the 

person is in bankruptcy or receivership, 

or when the person is known to be 

under criminal investigation for a 

violation of the Code. The same 

comment recommended that standards 

or limitations be included within the 

catch-all provision under proposed 

§ 301.6223–1(b)(4)(vi), which provides 

that a person loses the capacity to act in 

‘‘any similar situation where the IRS 

reasonably determines the person may 

no longer have capacity to act.’’ Another 

comment suggested that if a partnership 

becomes aware that the partnership 

representative lacks the capacity to act, 

the regulations should require the 

partnership to revoke that partnership 

representative’s designation. 

The capacity-to-act requirement was 

intended to correspond to situations 

where the person would not be able to 

represent the partnership during the 

administrative proceeding, for instance, 

when the person died, was legally 

incapacitated, or was otherwise unable 

to act during the administrative 

proceeding. After reviewing the 

comments regarding capacity to act, the 

Treasury Department and the IRS 

reevaluated whether such a requirement 

is needed. Rather than creating a 

regulatory requirement for who should 

be the partnership representative or a 

designated individual, the Treasury 

Department and the IRS believe that 

partnerships are in the best position to 

make the decision as to who can best 

represent them before the IRS. For the 

reasons discussed below, the Treasury 

Department and the IRS have 

determined that regulations regarding 

capacity to act would provide an 

unnecessary limitation on the 

partnership’s choice of who it believes 

is the best person to act on the 

partnership’s behalf. Therefore, the 

comments have not been adopted, and 


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Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 39335 

the capacity-to-act requirement has been 

removed from the final regulations. 

Under the proposed regulations, the 

partnership had complete control over 

who is designated as the partnership 

representative and appointed as a 

designated individual so long as the 

person designated or appointed satisfies 

the substantial presence requirement. 

Further, the partnership had the 

unilateral power to revoke the 

partnership representative for any 

reason. Therefore, the partnership can 

adequately protect itself if the concept 

of capacity is removed since it can 

revoke the partnership representative. 

Beyond requiring a partnership 

representative to have a substantial 

presence in the United States, the 

Treasury Department and the IRS have 

determined that it is not the proper role 

of the IRS to make further inquiries into 

whether, in the view of the IRS, the 

designated partnership representative or 

designated individual is the right person 

to represent the partnership. For 

example, some partnerships may not 

wish to be represented by a partnership 

representative that has filed for 

bankruptcy. But, in other cases, the 

partnership may determine that the 

partnership representative’s bankruptcy 

status is not relevant to whether the 

person can serve as partnership 

representative. 

By setting forth specific capacity 

factors, like bankruptcy, for making 

someone ineligible to act on behalf of 

the partnership, the regulations would 

be unnecessarily supplanting the 

partnership’s judgment with that of the 

government. Accordingly, the final 

regulations remove the capacity-to-act 

requirement entirely because the 

partnership should have as much 

flexibility as possible in determining a 

partnership representative so long as the 

person meets the substantial presence 

requirements. Because this section has 

been removed, the cross-reference to 

that section in § 301.6223–1(e) has also 

been removed. In addition, because this 

section has been removed, the comment 

suggesting that the IRS clarify that the 

partnership must require a revocation if 

it becomes aware that one of the 

capacity-to-act circumstances applies to 

its partnership representative is 

inapplicable and therefore is not 

adopted. 

Although the capacity-to-act section 

has been removed from the final 

regulations, the IRS may still determine 

that a designation of the partnership 

representative is not in effect due to 

circumstances that would have resulted 

in a partnership representative not 

having capacity to act because at least 

some of the capacity-to-act requirements 

overlapped with substantial presence. 

For instance, the IRS may determine 

that a partnership representative 

designation is not in effect if the 

partnership representative is 

incarcerated because that partnership 

representative cannot make herself 

available to the IRS, which means the 

partnership representative does not 

satisfy the substantial presence 

requirement. Having a separate 

capacity-to-act requirement was 

duplicated in these circumstances. 

Two of the specified circumstances 

listed in proposed § 301.6223–1(b)(4) 

involve determinations by a court that 

restrict a partnership representative’s or 

designated individual’s ability to serve. 

These circumstances would likely arise 

very rarely, and the IRS would likely 

not know these circumstances exist 

unless they were brought to the IRS’s 

attention by a partner or the partnership 

itself. In the case of a court order stating 

that a person does not have capacity to 

manage his or her estate, the IRS may 

not know about this issue because the 

very nature of such a proceeding is 

sensitive and may not be made public. 

In the case of a court order in which an 

injunction was sought, the most likely 

parties to seek such an injunction would 

be partners or the partnership itself. The 

partnership, generally through its 

reviewed year partners, may revoke a 

partnership representative designation 

without the need for a court order, 

which would alleviate the need for a 

partnership or partner to pursue a courtordered injunction. Even if such a court 

order existed, the IRS would need to 

review the court order to determine to 

what degree it inhibited a partnership 

representative from acting on behalf of 

the partnership. Because these 

circumstances would be rare, and 

because there would need to be actual 

knowledge of the court order as well as 

at least some interpretation of that court 

order, the Treasury Department and the 

IRS have removed these circumstances, 

which were previously listed in 

proposed § 301.6223–1(b)(4), from the 

regulations. 

B. Designating or Changing a 

Partnership Representative or a 

Designated Individual 

Multiple comments recommended 

changes to the timing and mechanics for 

designating, appointing, and changing a 

partnership representative and 

designated individual. The comments 

included suggestions about the timing of 

when a change should occur, the 

effective date of such a change, notice 

requirements surrounding the change, 

and who can revoke a designation. 

One comment suggested clarification 

regarding whether a partnership that has 

elected out of the centralized 

partnership audit regime under section 

6221(b) must designate a partnership 

representative. A partnership that has 

elected out of the centralized 

partnership audit regime is not required 

to designate a partnership 

representative. The partnership 

representative is the person who has the 

sole authority to act on behalf of the 

partnership under the centralized 

partnership audit regime. If a 

partnership is not subject to the 

centralized partnership audit regime, a 

partnership representative has no 

authority with respect to the 

partnership. Nothing in the regulations 

requires a partnership that has elected 

out of the regime to designate a 

partnership representative. Therefore, 

the comment was not adopted. 

i. Time for Changing the Partnership 

Representative 

Under proposed § 301.6223–1(d)(2) 

and (e)(2), a partnership representative 

designation can only be changed after 

the IRS mails a NAP or in conjunction 

with the filing of a valid AAR by the 

partnership under section 6227. Several 

comments suggested that proposed 

§ 301.6223–1(d)(2) and (e)(2) be revised 

to allow for changes to the partnership 

representative at any time after the 

original designation. One comment 

specifically recommended that the IRS 

adopt a system to monitor designations 

of and changes to partnership 

representatives in the same way that the 

IRS monitors the last known address of 

taxpayers. 

Allowing partnerships to change the 

partnership representative designation 

with the IRS at any time after the 

original designation is unnecessary and 

burdensome from a tax administration 

perspective and may increase burden for 

partnerships that are not selected for an 

administrative proceeding and have not 

filed an AAR. This is because the 

responsibilities and authority of a 

partnership representative are generally 

applicable only if a partnership is 

selected for examination as part of an 

administrative proceeding or the 

partnership files an AAR. In many 

cases, allowing partnerships to change 

the partnership designation before an 

administrative proceeding begins or 

before the partnership files an AAR 

means that the partnership would be 

filing a request to change a partnership 

representative that never takes, or plans 

to take, any action under the centralized 

partnership audit regime. 

Further, preparing and filing a request 

to change a designation of a partnership 


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representative requires partnerships to 

expend time and resources. Because the 

partnership representative designation 

may differ each year, tracking which 

partnership representatives were listed 

on which returns, and if a change were 

made, tracking those changes, can 

become complex. A partnership 

agreement requiring consultation with 

the partners (which may differ from year 

to year) when there is a change in the 

partnership representative adds further 

complexity. 

For its part, the IRS would have to 

process requests to change a designation 

and associate that change with the 

correct partnership account even if the 

IRS never selects the partnership taxable 

year for an administrative proceeding 

and, therefore, never interacts with the 

partnership representatives. Currently, 

the IRS does not have a system to 

process these changes outside of the 

administrative proceeding process or 

when an AAR is filed. 

A comment recommended that the 

IRS develop a system to track changes 

in the designation of the partnership 

representative that is similar to the 

system used to monitor a taxpayer’s last 

known address. Development of such a 

system would be very costly with little 

benefit to be gained because, as 

discussed above, the majority of changes 

would be for partnerships whose 

partnership representatives would never 

take any action on behalf of such 

partnerships. 

Accordingly, the final regulations 

maintain the rule that a partnership 

representative may only be changed in 

the context of an administrative 

proceeding or in conjunction with the 

filing of a valid AAR. As the IRS gains 

experience with the centralized 

partnership audit regime, and methods 

are identified to alleviate the 

administrative and regulatory burden 

created by changes to a partnership 

representative designation before the 

commencement of an administrative 

proceeding, the rules may be revisited 

in future forms, instructions, or other 

guidance. 

To address the aspect of the 

comments that reflect a desire to be able 

to change the partnership representative 

prior to the beginning of the 

administrative proceeding, § 301.6223– 

1(e)(2) has been revised to allow the 

partnership to change the partnership 

representative through revocation when 

the partnership is notified that the 

partnership return is selected for 

examination as part of an administrative 

proceeding, in addition to when the 

NAP is mailed. In general, the IRS will 

issue the partnership, but not the 

partnership representative, a notice of 

selection for examination prior to 

mailing the NAP to inform the 

partnership that it is being selected for 

examination. Under the proposed 

regulations, the partnership was not 

able to change the partnership 

representative until it received the NAP. 

This rule will provide the partnership 

an opportunity to change its partnership 

representative before an administrative 

proceeding commences, allowing the 

partnership to be represented by the 

partnership representative of its choice 

throughout the administrative 

proceeding. Because the notice of 

selection for examination is only issued 

to the partnership, and not the 

partnership representative, this rule 

allows the partnership to make a change 

to the partnership representative 

without the involvement of the 

partnership representative (whom the 

partnership may be removing for cause). 

As a result of the revised rule, the NAP 

can be sent to the partnership’s 

preferred partnership representative at 

the time the administrative proceeding 

begins. The rule also allows the 

partnership to change a designated 

individual prior to the beginning of the 

administrative proceeding. 

Other comments suggested that the 

designation of the partnership 

representative should be required on an 

annual basis, that the currently 

designated partnership representative 

should have the sole authority to 

represent the partnership for all open 

years, and that partnerships should be 

required to designate one partnership 

representative for all years in the 

context of a multi-year administrative 

proceeding. 

Under § 301.6223–1(c), a partnership 

must designate the partnership 

representative on the partnership return 

for that partnership taxable year, that is, 

Form 1065, U.S. Return of Partnership 

Income. Identification of a partnership 

representative on an annual basis with 

the return provides certainty regarding 

who is the partnership representative 

for a particular taxable year. The other 

systems suggested in the comments 

would be difficult to administer and 

could result in the IRS having to 

determine that no designation of a 

partnership representative is in effect 

because of this uncertainty. 

Designation of a partnership 

representative on the return for that 

taxable year is also not an undue burden 

on the partnership. The identification, 

selection, and designation of the 

partnership representative is wholly 

within the discretion of the partnership 

(provided the person designated meets 

the requirements under § 301.6223– 

1(b)). Nothing in the proposed 

regulations prevents a partnership from 

designating the same partnership 

representative on each partnership 

return it files or, once administrative 

proceedings with respect to more than 

one taxable year have commenced, 

designating one partnership 

representative (through the revocation 

procedures described in proposed 

§ 301.6223–1(e)) to act for the 

partnership for all years subject to the 

administrative proceeding. 

Further, the partnership 

representative plays an important role 

in representing the interests of the 

partnership and, by extension, the 

partners for the taxable year subject to 

an administrative proceeding. The 

make-up of the partners in a partnership 

may change from tax year to tax year, 

and the economic arrangements within 

the partnership and between partners 

may also change. The partnership and 

its partners for each particular taxable 

year are in the best position to 

determine who the partnership 

representative should be if that 

particular taxable year is subject to an 

administrative proceeding. For these 

reasons, the comments have not been 

adopted. 

ii. Resignation 

Proposed § 301.6223–1(d) provided 

the rules for resignations of partnership 

representatives and designated 

individuals. Proposed § 301.6223– 

1(d)(1) provided that a resignation by a 

partnership representative ‘‘may’’ 

include a designation of a successor 

partnership representative. However, 

when the resignation was made with the 

filing of an AAR, proposed § 301.6223– 

1(d)(2) provided that the partnership 

representative ‘‘must’’ designate a 

successor partnership representative. 

Proposed § 301.6223–1(d)(3) provided 

that a resigning designated individual 

‘‘may, but is not required to,’’ designate 

a successor. 

One comment noted the differences in 

the quoted language of these provisions 

and recommended that the final 

regulations be clarified to explain the 

consequences, if any, of those 

differences. The comment also 

questioned why the proposed 

regulations required designation of a 

successor partnership representative in 

the case of an AAR resignation, but not 

in the case of resignation that occurs 

during an administrative proceeding. 

The comment suggested that the rules 

should require designation of a 

successor for all resignations. In 

contrast, another comment 

recommended that a partnership 

representative never be permitted to 

designate a successor partnership 


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representative and suggested that the 

partnership have a 30-day window after 

a resignation to designate a successor 

partnership representative. 

After considering these comments, the 

final regulations remove the ability of a 

resigning partnership representative or 

designated individual to designate a 

successor. Under the proposed rule, a 

resigning partnership representative had 

the power to designate a partnership 

representative even though the 

partnership might not approve of the 

new partnership representative. For 

instance, this could occur in a situation 

where the partnership representative is 

resigning due to an adverse relationship 

with the partnership. To avoid this 

result, the resignation of a partnership 

representative or designated individual 

should be the final action of that person 

for purposes of the centralized 

partnership audit regime. 

For similar reasons, a resigning 

partnership representative should not be 

able to resign by filing an AAR. The 

partnership representative or designated 

individual may be revoked 

simultaneously with the filing of an 

AAR, though an AAR may not be filed 

solely for that purpose. See proposed 

§ 301.6227–1(a). However, it is unfair to 

the partnership to allow a resigning 

partnership representative to request 

adjustments to items of a partnership. 

Accordingly, the final regulations have 

been revised to prohibit a resignation at 

the time of the filing of an AAR. 

Proposed § 301.6223–1(d)(3) provided 

that a resignation of a designated 

individual is ‘‘subject to the time of 

resignation restrictions described in 

[proposed] § 301.6223–1(d)(2),’’ that is, 

the timing rules that apply to a 

resignation of a partnership 

representative. One comment requested 

clarification of whether the ability of a 

designated individual to resign is 

subject to all of the restrictions in 

proposed § 301.6223–1(d)(2) or whether 

the quoted language means some 

restrictions do not apply. As discussed 

above, the final regulations have been 

revised to remove the ability of a 

partnership representative to resign 

with the filing of an AAR; a partnership 

representative may resign only after a 

NAP has been issued by the IRS, or at 

such other time as prescribed by the IRS 

in other guidance. The final regulations 

have also been revised to provide that 

the rules governing when and how a 

partnership representative may resign 

also apply to designated individuals. 

Section 301.6223–1(d) provides specific 

rules explaining how a designated 

individual resigns. Therefore, 

clarification is not necessary, and the 

comment was not adopted. 

iii. Revocation 

Proposed § 301.6223–1(e)(3)(i) 

provided that a revocation must be 

signed by a person who was a general 

partner at the close of the taxable year 

for which the partnership representative 

designation is in effect as shown on the 

partnership return for that taxable year. 

One comment suggested that the 

language ‘‘as shown on the partnership 

return’’ be deleted to make clear that a 

partnership is not limited to revoking 

only the initial partnership 

representative designated on the 

partnership return. 

The purpose of the quoted language 

was to describe how to determine 

whether a person was a general partner 

at the close of the taxable year, that is, 

by looking to the partnership return for 

that taxable year. It was not intended to 

describe what type of partnership 

representative designation can be 

revoked by the partnership. A 

partnership can revoke any designation 

of a partnership representative, 

including a designation made by the 

IRS, provided permission is granted by 

the IRS. See § 301.6223–1(e)(6). Sections 

301.6223–1(e)(1) and (e)(4) have been 

revised to clarify this point. 

The comment also suggested that any 

partner of the partnership, instead of 

only a general partner, should be able to 

sign a revocation provided that partner 

certifies the partner has the authority to 

do so. This comment was adopted in the 

final regulations. The final regulations 

allow any partner who was a partner 

during the partnership taxable year to 

which the revocation relates, not just a 

general partner, to sign a revocation. 

Allowing any partner for the taxable 

year to which the revocation relates to 

sign the revocation provides maximum 

flexibility to the partnership to 

determine which partners should have 

that authority. 

The rules under proposed § 301.6223– 

1(e)(3)(ii) made clear that for purposes 

of determining who may sign a 

revocation for a limited liability 

company (LLC), a member-manager is 

treated as a general partner and any 

other member is treated as a non-general 

partner. These rules were necessary to 

clarify in the context of LLCs which 

members can sign a revocation. As 

discussed above in this section of the 

preamble, however, the proposed 

regulations have been revised to permit 

any partner during the taxable year to 

which the revocation relates, not just a 

general partner, to sign a revocation. 

Therefore, § 301.6223–1(e)(3)(ii) has 

been removed from the regulations 

because the rule equating membermanagers with general partners is no 

longer necessary. 

The comment also recommended that 

the ‘‘catch-all’’ provision under 

proposed § 301.6223–1(b)(4)(vi) 

(regarding capacity to act) also apply in 

determining whether partners other 

than a general partner can sign a 

revocation. Proposed § 301.6223–1(b)(4) 

has been removed from the final 

regulations and is no longer referenced 

in § 301.6223–1(e); therefore, this 

comment was not adopted. The 

references to capacity to act were 

necessary when only certain partners 

could revoke the designation. Because 

the regulations have been revised to 

allow any partner for the partnership 

taxable year to which the revocation 

relates to sign the revocation, there is no 

need to describe situations in which 

general partners do not have the 

capacity to act and no need for the 

associated catch-all provision. 

Lastly, the comment recommended 

that the regulations explicitly provide 

that a partnership can revoke a 

partnership representative designation 

for any reason. As discussed in section 

2.C. of this preamble, nothing in the 

regulations requires the partnership to 

have a specific reason, or any reason at 

all, for a revocation. However, this 

comment was adopted to clarify that 

neither a revocation nor a resignation 

requires any particular reason. The final 

regulations also clarify that a revocation 

may occur regardless of when and how 

the designation was made, except with 

respect to a designation made by the 

IRS. See § 301.6223–1(e)(6). 

Proposed § 301.6223–1(e)(3)(ii) 

applied the rules for signing a 

revocation to LLCs and provided that for 

purposes of the proposed regulations 

the term LLC means an organization 

that, among other things, ‘‘is classified 

as a partnership for Federal tax 

purposes.’’ A comment recommended 

that the phrase ‘‘is classified as a 

partnership for Federal tax purposes’’ be 

removed from the definition of LLC 

because the quoted language creates 

confusion about whether the LLC has to 

be currently classified as a partnership 

for the proposed rules regarding 

revocation to apply. As discussed in this 

section of the preamble, § 301.6223– 

1(e)(3)(ii) has been removed from the 

regulations because the paragraph is no 

longer necessary in light of the changes 

to the revocation process. 

While considering these comments, 

the Treasury Department and the IRS 

had the opportunity to reevaluate the 

portion of the rule in proposed 

§ 301.6223–1(e)(3) that required a 

person revoking a designation to be a 

partner at the close of the taxable year 


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and determined that this rule is 

unnecessarily restrictive. This is 

because being a partner on the last day 

of the taxable year is not meaningful so 

long as the person is a partner during 

the taxable year. For instance, a person 

who is a partner on the last day of the 

taxable year could be a partner with a 

small interest in the partnership or 

could have acquired their interest in the 

partnership on the next to last day of the 

partnership taxable year, whereas a 

person who is a partner during the year 

but not on the last day of the year could 

have owned a very large interest in the 

partnership or could have been a 

partner for all days during the year, 

except the last day. 

Further, while the partnership return 

identifies partners during the taxable 

year, it is not readily apparent from the 

face of the return or the Schedules K– 

1 who was a partner on the last day of 

the partnership taxable year. Therefore, 

the IRS could not easily determine if the 

partner signing the revocation was a 

partner on the last day of the taxable 

year. 

Finally, there may be more partner 

turnover during a partnership’s taxable 

year as a result of fewer partnership 

short taxable years after the repeal of 

technical terminations under section 

under 708(b)(1). See section 13504 of 

‘‘[a]n Act to provide for reconciliation 

pursuant to titles II and V of the 

concurrent resolution on the budget for 

fiscal year 2018,’’ Public Law 115–97. 

Generally, under a technical termination 

under section 708(b)(1)(B), when 50 

percent or more of a partnership’s 

capital and profits are sold or exchanged 

during any 12 month period, the 

partnership taxable year ended, causing 

a short partnership taxable year. 

However, after repeal of the technical 

termination rule, there can be 

significant partner turnover during a 

partnership’s full taxable year without 

resulting in an early close of the 

partnership taxable year. Thus, partners 

who dispose of their partnership 

interest, and who would have been 

partners for a full taxable year at the 

close of a short partnership taxable year 

when there was a technical termination, 

are now partners for only part of a full 

12 month partnership taxable year. 

Accordingly, the final regulations 

have been revised to allow any person 

who was a partner at any time during 

the taxable year to which the revocation 

relates to sign the revocation. The final 

regulations were also revised to provide 

that the Treasury Department and the 

IRS may in the future provide forms, 

instructions, or other guidance that 

would allow the partnership to revoke 

the designation of a partnership 

representative if there are no reviewed 

year partners (as defined in proposed 

§ 301.6241–1(a)(9)) at the time of 

revocation. 

One comment also suggested that a 

partnership should be able to revoke an 

appointment of a designated individual 

without first revoking the entity 

partnership representative designation. 

This comment was adopted in 

§ 301.6223–1(e). However, to ensure that 

the IRS has a contact point for the 

partnership, the regulations under 

§ 301.6223–1(e)(1) have also been 

revised to provide that if a partnership 

revokes the appointment of a designated 

individual and not the entity 

partnership representative, the 

partnership must appoint a successor 

designated individual at the same time 

of the revocation. Similar to the rules 

under the regulations with respect to the 

partnership representative resignation, 

failure to follow the rules of § 301.6223– 

1(e), including failure to appoint a 

successor designated individual, results 

in an invalid revocation of the 

designated individual. 

iv. Effective Date of a Resignation or 

Revocation 

The proposed regulations provided 

that a resignation or revocation of the 

partnership representative (or 

designated individual, if applicable) is 

effective 30 days from the date on which 

the IRS receives written notification of 

the resignation or the revocation. See 

proposed § 301.6223–1(d)(1), (e)(1). One 

comment recommended that the IRS 

refrain from requiring time-sensitive 

actions or responses from the 

partnership during this 30-day period. 

Another comment recommended that a 

resignation or revocation of a 

partnership representative be 

immediately effective in certain 

situations, including when the 

partnership representative is the subject 

of a court order determining the 

partnership representative is 

incompetent or enjoining the 

partnership representative from serving 

as the partnership representative, the 

partnership representative is 

incarcerated, the partnership 

representative has become the subject of 

a criminal tax investigation, the 

partnership representative has been 

convicted of a felony or of a crime that 

involves dishonesty or breach of trust, 

or the partnership representative has 

become the subject of bankruptcy or 

receivership proceedings. 

In response to these comments, 

§ 301.6223–1(d) and (e) are revised to 

provide that generally a partnership 

representative resignation or revocation 

is effective immediately upon receipt by 

the IRS. In cases where there is a 

revocation of a partnership 

representative designated by the IRS, 

the final regulations provide that the 

revocation is effective on the date the 

IRS sends notification that it determined 

that the revocation is valid. 

The comment requesting that the 

revocation or resignation be 

immediately effective on the date it is 

signed or sent was not adopted. Until it 

is received by the IRS, the IRS cannot 

be aware of a revocation or resignation 

to give it effect. Before the revocation or 

resignation is received, the IRS will 

continue to work with the person 

designated to represent the partnership 

as the partnership representative. 

Nothing in the regulations prevents a 

partnership or partnership 

representative from providing a 

revocation or resignation directly to the 

IRS employee handling the 

administrative proceeding to ensure that 

the IRS has received prompt notification 

of the change. 

Proposed § 301.6223–1(d)(1) and 

(e)(1) provided that the IRS will notify 

the partnership and other affected 

persons (the resigning partnership 

representative or designated individual 

or the partnership representative (and 

designated individual, if applicable) 

whose status is being revoked) when the 

IRS receives a resignation or revocation. 

To provide assurance that the IRS has 

received and processed a resignation or 

revocation, these sections of the final 

regulations have been revised to provide 

that, no later than 30 days after receipt 

of a valid notification of a revocation or 

resignation, the IRS will notify the 

partnership and the resigning 

partnership representative or designated 

individual or the partnership 

representative (and designated 

individual, if applicable) whose status is 

being revoked of its acceptance. 

Proposed § 301.6223–1(e)(4) provided 

that a partnership cannot revoke the 

designation of a partnership 

representative designated by the IRS 

unless the partnership receives 

permission from the IRS. The final 

regulations under § 301.6223–1(e)(6) are 

clarified to provide that the IRS will not 

unreasonably withhold such 

permission. To avoid confusion, 

§ 301.6223–1(e)(3) and (6) have been 

revised to provide that when permission 

is granted, the IRS will send the 

notification described in paragraph 

§ 301.6223–1(e)(1). The effective date of 

the revocation is the date of that 

notification, which, if the IRS is 

granting permission for the revocation 

of the IRS-designated partnership 

representative, will be sent no later than 

30 days after receipt of the revocation. 


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v. Notification of Change 

Proposed § 301.6223–1(d)(1) provided 

that a resigning partnership 

representative must notify the 

partnership and the IRS of the 

resignation, and proposed § 301.6223– 

1(e)(1) provided that when a partnership 

revokes a partnership representative 

designation, the partnership must notify 

the partnership representative and the 

IRS. Proposed § 301.6223– 

1(e)(3)(iii)(A)(2) required a notification 

of revocation to include a certification 

from the partner signing the revocation 

that the person has provided a copy of 

the revocation to the partnership and to 

the partnership representative whose 

designation is being revoked. Failure to 

include that certification rendered the 

revocation invalid. One comment 

recommended clarification on how this 

certification should be made when the 

partnership representative is deceased 

or dissolved or the partnership is no 

longer in contact with the partnership 

representative. The comment suggested 

that sending the copy of the revocation 

to the last known address should be 

sufficient. The comment also suggested 

that the regulations clarify whether 

there are any other restrictions on the 

method of notifying the partnership 

representative, such as proof of delivery 

or electronic delivery. 

State law and any contractual 

arrangement between the parties 

generally control the terms of the 

relationship between the partnership 

and the partnership representative. 

Except as necessary to carry out the 

statute, the regulations implementing 

the centralized partnership audit regime 

attempt not to impose requirements 

with respect to interactions between the 

partnership and the partnership 

representative. The requirements in 

proposed § 301.6223–1(d)(1) and (e)(1) 

that the partnership notify the 

partnership representative and that the 

partnership representative notify the 

partnership were not consistent with 

this approach. Therefore, the Treasury 

Department and the IRS believe that 

including these requirements would 

unnecessarily create regulatory burdens 

on partnerships and partnership 

representatives without any significant 

benefit to tax administration. 

Accordingly, the final regulations have 

been revised to remove these 

requirements. Consequently, a resigning 

partnership representative and a 

partnership making a revocation must 

now only notify the IRS of the change 

in designation. As long as they notify 

the IRS as required under the 

regulations, the partnership and the 

partnership representative may agree to 

other notification requirements and are 

in the best position to determine if such 

requirements are necessary. 

Another comment suggested that, in 

the case of an entity partnership 

representative, notification by the IRS of 

a revocation (as well as other 

notifications) should also be required to 

be sent to the designated individual. 

This comment was not adopted. In the 

case of a change to an entity partnership 

representative, the IRS will only send 

one notification and plans to adopt 

procedures under which such a 

notification will be sent to the 

partnership representative and 

addressed to the attention of the 

designated individual. This procedure 

should avoid the need to send duplicate 

notifications, which is burdensome for 

the IRS, while also allowing the 

partnership, the entity partnership 

representative, and the designated 

individual to arrange their affairs in a 

way to ensure that important 

notifications from the IRS are received 

by the appropriate persons. 

Proposed § 301.6223–1(e)(1) required 

the IRS to notify the partnership and the 

affected partnership representative of a 

revocation. This requirement has been 

revised to provide that the IRS will only 

give notification of a revocation made 

after the issuance of a notice of selection 

for examination or a NAP. In contrast, 

the final regulations do not require the 

IRS to give notification of a revocation 

made simultaneously with an AAR. 

This change is warranted because in 

some cases, the IRS might accept an 

AAR as filed without further interaction 

with the partnership or communication 

with the partnership representative. 

Requiring the IRS to provide 

notification of a change in partnership 

representative when an AAR is filed is 

unnecessary unless the IRS selects the 

partnership for an examination as part 

of an administrative proceeding, in 

which case the partnership and the new 

partnership representative will receive a 

NAP, which is confirmation that the IRS 

received the change made on the AAR. 

The partnership can also confirm with 

the IRS at that time of receipt of the 

notice of selection for examination that 

the IRS received the change of 

partnership representative. 

In addition, the final regulations 

clarify that the failure of the IRS to send 

any notifications under §§ 301.6223– 

1(d) and (e) to acknowledge receipt of a 

valid resignation or revocation does not 

invalidate the resignation or revocation. 

The notification provides the 

partnership with information about 

when the change in partnership 

representative became effective. 

However, the mere fact that a party does 

not receive an IRS notification does not 

mean that the resignation or revocation 

is not a valid change in partnership 

representative. A resignation or 

revocation that is valid under paragraph 

(d) or (e) of § 301.6223–1 is valid 

regardless of whether the IRS sends 

notification of receipt. 

C. IRS Designation of Partnership 

Representative 

i. Determination That a Designation Is 

Not in Effect 

Proposed § 301.6223–1(f) provided 

the IRS may determine a designation is 

not in effect under certain 

circumstances. Under proposed 

§ 301.6223–1(f)(1), if the IRS makes a 

determination that a designation is not 

in effect, the IRS will notify the 

partnership and ‘‘the most recent 

partnership representative for that 

partnership taxable year’’ of that 

determination. One comment noted that 

there may be circumstances where there 

was never a partnership representative 

for the taxable year and recommended 

the regulations be clarified on this 

point. The comment describes an 

example where the partnership 

representative designated on the 

partnership return lacks substantial 

presence and concludes that there 

would be no partnership representative 

in that case. 

This conclusion is incorrect. A 

partnership representative designated 

under § 301.6223–1 is in effect unless 

and until the IRS determines otherwise. 

See § 301.6223–1(b)(1). Therefore, a 

person designated on a partnership 

return as the partnership representative 

is the partnership representative for that 

taxable year even if the person lacks 

substantial presence as defined in 

§ 301.6223–1(b)(2) unless and until the 

IRS makes a determination, in 

accordance with § 301.6223–1(f), that 

the designation is not in effect. 

Accordingly, prior to the issuance of a 

notification from the IRS under 

§ 301.6223–1(f)(1) that the partnership 

representative designation is not in 

effect, the designation of the partnership 

representative on the partnership return 

is in effect, even if the person 

designated lacks substantial presence in 

the United States. 

Because a designated partnership 

representative is in effect unless and 

until the IRS determines otherwise, the 

vast majority of partnerships will have 

a partnership representative designation 

in effect because they will have 

designated the partnership 

representative on the return as required 

under § 301.6223–1(c). As a result, in 

most cases there will be a partnership 


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representative to whom the notification 

must be sent. However, there may be 

situations in which the partnership 

failed to make a valid designation in 

accordance with § 301.6223–1(c). To 

address these situations, the comment 

was adopted and § 301.6223–1(f)(1) has 

been revised to clarify that the IRS is not 

required to notify the most recent 

partnership representative if the 

partnership failed to designate one. 

Another comment recommended that 

any determination that a designation is 

not in effect should not be made 

effective until a new partnership 

representative has been designated, 

either by the partnership or the IRS. 

This comment was not adopted. If there 

has been a determination that a 

partnership representative designation 

is not in effect for a taxable year, the IRS 

has determined that the partnership 

representative is no longer a valid 

partnership representative for purposes 

of conducting an administrative 

proceeding of that partnership with 

respect to that taxable year. To keep the 

designation in place would run counter 

to this determination and would hinder 

the partnership administrative 

proceeding. If, for example, the 

partnership representative no longer 

meets the substantial presence 

requirements under § 301.6223–1(b) 

because the partnership representative 

has left the country and, as a result, is 

unreachable, neither the partnership nor 

the IRS benefits from having that 

partnership representative designation 

remain in place until a new partnership 

representative is designated. The best 

result for both the partnership and the 

IRS is for the partnership to designate a 

new partnership representative who can 

move the administrative proceeding 

forward, which the partnership will 

have the opportunity to do prior to the 

IRS designating one under the rules in 

§ 301.6223–1(f). Delaying the effective 

date of the determination that no 

partnership representative is in effect 

slows down the administrative 

proceeding, which does not benefit the 

partnership or the IRS. 

Proposed § 301.6223–1(f)(2) provided 

a list of reasons why the IRS might 

determine that a partnership 

representative designation is not in 

effect. Proposed § 301.6223–1(f)(2) 

provided that the IRS may determine a 

designation is not in effect when, among 

other circumstances, the IRS has 

received multiple revocations within a 

90-day period. See proposed 

§ 301.6223–1(e)(7). One comment 

suggested that the regulations should 

limit the discretion of the IRS to 

determine that a designation is not in 

effect under proposed § 301.6223–1(f)(2) 

to situations where the IRS determines 

the multiple revocations represent an 

effort to delay or obstruct the 

administrative proceeding. 

While there may be benign reasons for 

multiple revocations, the practical effect 

is the same regardless of the reason. The 

IRS’s receipt of multiple revocations 

and designations will delay the 

administrative proceeding and prevent 

the IRS from effectively conducting an 

administrative proceeding. The 

administrative proceeding should not be 

delayed, intentionally or 

unintentionally, due to an inability to 

settle on a partnership representative. 

Additionally, requiring the IRS to 

determine if multiple revocations were 

due to inadvertence or a desire to delay 

or obstruct the administrative 

proceeding adds additional burden that 

would be costly for both the partnership 

and the IRS to resolve. It would also 

inevitably lead to disputes between the 

IRS and partnerships regarding factually 

intensive questions underlying the 

intent of revocations. Any time and 

resources devoted to discerning the 

purpose behind each revocation 

ultimately delays the entire 

administrative proceeding. There may 

be situations in which partners 

genuinely disagree as to who had 

authority to appoint the partnership 

representative or who the partnership 

representative should be. However, 

these disputes are best resolved by the 

partners themselves. The IRS should not 

be the arbiter of disputes between 

partners. Consequently, this comment 

has not been adopted. 

There may be circumstances, 

however, when multiple revocations are 

necessary due to circumstances outside 

of the partnership’s control, such as 

death or serious health issues or due to 

a ministerial error. To accommodate 

these types of circumstances, the 

proposed regulations provided the IRS 

with the discretion to keep the 

partnership designation in effect even 

though multiple revocations were 

received within a 90-day period. The 

proposed regulations did not require the 

IRS to make a determination that the 

designation is no longer in effect, but 

rather provided the IRS with the ability 

to make such a determination when 

appropriate. In retaining this rule, the 

final regulations accommodate 

situations where multiple revocations 

are not the result of bad faith and the 

IRS determines that allowing such 

revocations does not interfere with the 

IRS’s ability to conduct the 

administrative proceeding. 

Section 301.6223–1(f)(5) of the 

proposed regulations provided that the 

multiple-revocation rule was triggered if 

the IRS receives more than one 

revocation for the same partnership 

taxable year within a 90-day period. The 

final regulations remove the language 

‘‘signed by different partners’’ from that 

provision. The fact that multiple 

revocations are received within 90 days 

is all that is required for the IRS to 

exercise its discretion under 

§ 301.6223–1(f)(2). The number of 

partners involved is not relevant to 

whether multiple revocations are 

received and whether that could slow 

down the administrative proceeding. 

Accordingly, the regulations have been 

revised to make clear that the receipt of 

multiple revocations, not the receipt of 

multiple revocations signed by different 

partners, is what is required for the 

provision in § 301.6223–1(f) to be 

satisfied. 

In addition, the rule in the proposed 

regulations allowing the partnership the 

option to appoint a partnership 

representative before one is designated 

by the IRS has been revised in the case 

of multiple revocations. The final 

regulations provide that if the IRS 

determines a designation is not in effect 

in the case of multiple revocations, the 

IRS will designate a partnership 

representative, and unlike the general 

rule for IRS designation of a partnership 

representative, the partnership will not 

be given 30 days to designate a 

partnership representative. The stricter 

rule in the case of multiple revocations 

is necessary because providing the 

partnership another opportunity to 

designate a partnership representative 

would only perpetuate the existing 

problem and may delay the 

administrative proceeding. The final 

regulations also make clear that the 

multiple revocations rule applies to 

multiple revocations of a designated 

individual as well. Although the IRS 

may designate a new partnership 

representative in the case of multiple 

revocations, like any other IRS 

designation of a partnership 

representative, the partnership may 

revoke that partnership representative 

designation with the consent of the IRS. 

In order to clarify the operation of the 

90-day period under the multiple 

revocation rule, § 301.6223–1(e)(7) was 

revised to provide that if the IRS 

receives a revocation (the current 

revocation), and, within the 90-day 

period prior to receiving the current 

revocation, the IRS had received another 

revocation for the same partnership 

taxable year, the IRS may determine that 

a designation is not in effect. This 

change clarifies that the multiple 

revocation rule may apply to any 

revocation received by the IRS. When 

the IRS receives a revocation, the IRS 


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may look back to the preceding 90 days 

and determine whether it had received 

a prior revocation for the same taxable 

year. If it had, the multiple revocation 

rule applies. 

A time limitation for the IRS to notify 

the partnership that the designation is 

not in effect was also added to the 

multiple revocation rule in § 301.6223– 

1(e)(7)(ii). That time limitation provides 

that if the IRS plans to determine a 

designation is not in effect due to 

receipt of multiple revocations, the IRS 

must do so within 90 days of the receipt 

of the current revocation the IRS is 

considering. For example, assume the 

partnership files two revocations with 

respect to the same taxable year—one on 

May 31, 2019 and one on August 25, 

2019. With respect to the August 25th 

revocation, the IRS received the May 

31st revocation within the 90-day 

period prior to August 25, 2019, 

meaning the multiple revocation rule 

under § 301.6223–1(e)(7)(i) applies. 

Under the time limitation provided in 

§ 301.6223–1(e)(7)(ii), the IRS would 

then have 90 days from August 25, 2019 

to determine a designation is not in 

effect. If, during that 90-day period 

starting with August 25, 2019, the IRS 

received another revocation, the 

multiple revocation rule under 

§ 301.6223–1(e)(7)(i) would again be 

triggered, and pursuant to § 301.6223– 

1(e)(7)(ii), the IRS would have another 

90 days from that additional revocation 

to determine a designation is not in 

effect. The time limitation under 

§ 301.6223–1(e)(7)(ii) provides certainty 

for the partnership and the IRS 

regarding when the IRS may determine 

that a designation is not in effect after 

multiple revocations have been filed. 

Another comment recommended that 

a partnership that makes a ‘‘technically 

faulty’’ designation and receives 

notification from the IRS that no 

designation of a partnership 

representative is in effect should be 

given an opportunity to cure that 

designation before the IRS designates a 

new partnership representative. Nothing 

in the regulations prevents the IRS from 

providing the partnership with an 

opportunity to cure a defective 

designation prior to the IRS making its 

own designation. The IRS will provide 

additional guidance to its agents 

regarding designation of a partnership 

representative, and the IRS intends to 

generally recommend providing an 

opportunity to cure a defective 

designation. The IRS, however, may not 

allow for such an opportunity in all 

cases due to time restraints, multiple 

revocations, or the particular 

circumstances. Accordingly, this 

comment was not adopted. However, as 

the Treasury Department and the IRS 

develop more experience in this area, 

additional guidance may be issued. 

Proposed § 301.6223–1(f)(2) has also 

been amended to add a new paragraph 

(vii), which provides that the IRS may 

determine that a designation is not in 

effect for any other reason described in 

published guidance. This paragraph was 

added to allow flexibility to add other 

circumstances that may require the IRS 

to determine the designation is not in 

effect as the Treasury Department and 

the IRS gain more experience with the 

centralized partnership audit regime. 

The final regulations also provide that 

the IRS is under no obligation to search 

for information about whether any of 

the circumstances listed in § 301.6223– 

1(f)(2) exists. In addition, the final 

regulations clarify that even if the IRS 

has knowledge that one of the 

circumstances listed in § 301.6223– 

1(f)(2) exists, the IRS is not required to 

determine that a designation is not in 

effect. This clarification was added for 

the reasons stated above in this section 

of the preamble. For instance, partners 

may have filed multiple revocations 

within 90 days, but if there was a valid 

reason for the multiple revocations, the 

IRS may not need to determine the 

partnership representative designation 

is not in effect. 

ii. IRS Designation 

Numerous comments recommended 

changes to the rules under proposed 

§ 301.6223–1(f) governing IRS 

designation of a partnership 

representative when no designation is in 

effect. Several comments recommended 

that the regulations impose restrictions 

on whom the IRS may designate to serve 

as the partnership representative. Two 

comments suggested prohibiting the IRS 

from designating an IRS employee, 

agent, or contractor as the partnership 

representative. The Treasury 

Department and the IRS agree that an 

IRS employee, agent, or contractor who 

has no affiliation with the partnership 

subject to an administrative proceeding 

should not be designated as the 

partnership representative. An IRS 

employee, agent, or contractor may be a 

partner in the partnership subject to an 

administrative proceeding, however. 

Provided this interest in the partnership 

is unrelated to the individual’s 

affiliation with the IRS, the individual’s 

affiliation with the IRS should not 

preclude designation as the partnership 

representative. Accordingly, 

§ 301.6223–1(f)(5) was revised to 

provide that the IRS may not designate 

an IRS employee, agent, or contractor as 

the partnership representative unless 

the individual is a partner in the 

partnership subject to an administrative 

proceeding. Even if the IRS employee, 

agent, or contractor is a partner in such 

partnership, however, the IRS intends to 

avoid designating such an individual as 

the partnership representative if another 

suitable person is available. 

Several comments recommended that 

the IRS be required to select a current 

partner to serve as the partnership 

representative. Another comment 

recommended that the IRS be required 

to select the partner with the largest 

profits interest. Another comment 

requested that the regulations include 

an ordering rule (that is, the IRS selects 

a partner first; if no partner is available, 

an employee, etc.). Another comment 

recommended that where the 

partnership is in bankruptcy, the IRS 

should select the trustee to serve as the 

partnership representative. 

Imposing regulatory restrictions on 

whom the IRS can designate as the 

partnership representative could 

adversely affect the IRS’s ability to 

select a suitable partnership 

representative, which harms both the 

IRS and the partnership. In some cases, 

a current partner might be the 

appropriate selection. In other cases, a 

former partner or an employee of the 

partnership might be more appropriate. 

For example, a current year partner 

might be more appropriate in a case 

where the current year partner is the 

person with access to the books and 

records of the partnership. However, a 

former partner has the advantage of 

being a partner from the year subject to 

an administrative proceeding and may 

be able to communicate with reviewed 

year partners more efficiently when 

seeking to modify the imputed 

underpayment. In the context of a 

partnership in bankruptcy, a nonmember manager of the partnership, 

more familiar with the partnership’s 

day-to-day business might be a more 

appropriate partnership representative 

than the bankruptcy trustee hired 

during the administrative proceeding. 

The Treasury Department and the IRS 

do not yet have experience with the new 

centralized partnership audit regime. As 

such, it would be unwise at this time to 

restrict whom the IRS may designate to 

be the partnership representative (other 

than as described earlier in this section). 

Consequently, comments 

recommending these types of 

restrictions were not adopted. 

One comment asked that the final 

regulations clarify that the IRS may 

select an entity partnership 

representative and that if it does so, the 

IRS must provide the partnership with 

the contact information of the 

designated individual. This comment 


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was adopted. Therefore, if the IRS does 

designate an entity to be the partnership 

representative, the IRS will also appoint 

a designated individual and provide the 

contact information of the designated 

individual to the partnership. See 

§ 301.6223–1(f)(5)(i). 

Proposed § 301.6223–1(f)(5)(ii) 

provides a list of factors the IRS ‘‘may’’ 

consider when designating a 

partnership representative. A comment 

suggested that proposed § 301.6223– 

1(f)(5)(ii) be revised to provide that the 

IRS ‘‘will ordinarily’’ consider ‘‘one or 

more’’ of those factors. The IRS intends 

to consider these factors when 

designating a partnership 

representative. Because the suggested 

language ‘‘will ordinarily’’ more 

accurately reflects the IRS’s intent this 

comment has been adopted. However, 

the final regulations have also been 

revised to clarify that the IRS is not 

obligated to search for information 

about the factors to be considered and 

that IRS knowledge of any of the factors 

does not obligate the IRS to select a 

particular person as partnership 

representative. This clarification is 

particularly important in the case of a 

partnership that is nonresponsive 

because the IRS may not be able to 

consider certain factors where the 

partners are unreachable and certain 

information is not readily attainable. 

The IRS, therefore, will ordinarily 

consider these factors, but the IRS may 

not consider the factors in every case. 

The final regulations have also been 

revised to clarify that these factors are 

not the equivalent of requirements for 

eligibility to be designated by the IRS as 

a partnership representative. Only one 

factor may be applicable to the person 

designated as partnership representative 

and yet that person may be the one who 

is appropriate to designate based on 

who is available and willing to serve 

and the unique facts and circumstances 

of the partnership, the administrative 

proceeding, or other issues. 

Accordingly, § 301.6223–1(f)(5)(ii) has 

been revised to clarify that the IRS will 

ordinarily consider one or more of the 

factors when determining whom to 

designate as partnership representative, 

no single factor is determinative, and a 

person may be designated by the IRS as 

partnership representative even if none 

of the factors is applicable. 

Several comments requested changes 

to the factors listed in proposed 

§ 301.6223–1(f)(5)(ii). One comment 

recommended that the IRS generally 

consider the profits interests of the 

partners. Considering the profits interest 

of a partner is reasonable because profits 

interest can in some circumstances 

directly affect how the results of an 

administrative proceeding will affect an 

individual partner. Additionally, 

because profits interest is a factor that 

can be determined from the face of the 

partnership return for most 

partnerships, consideration of a 

partner’s profits interest when 

designating a partnership representative 

is administrable for the IRS. Therefore, 

§ 301.6223–1(f)(5)(ii) has been revised to 

adopt this comment. 

One comment suggested that the IRS 

should consider the person’s 

involvement in the partnership’s 

business in determining whether to 

designate that person as the partnership 

representative. The regulations already 

contain factors that consider the 

person’s overall knowledge of the 

partnership and its books and records. 

These factors already incorporate 

consideration of the person’s 

involvement in the partnership’s 

business. Because the proposed factor 

duplicates those already included, this 

comment was not adopted. 

Several comments made suggestions 

with respect to the partnership’s 

inability to revoke a partnership 

representative designation made by the 

IRS without having IRS consent of that 

revocation. One comment disagreed in 

general with this rule and recommended 

that the partnership be able to revoke a 

partnership designation made by the 

IRS without the consent of the IRS. 

Another comment stated that the 

partnership should be involved in the 

IRS’s designation of a partnership 

representative. Another comment 

suggested that the partnership should be 

able to revoke a partnership 

representative designated by the IRS if 

there is a bona fide dispute over the 

capacity of the partnership 

representative designated by the IRS. 

The rule that the partnership must 

seek the IRS’s permission before 

revoking an IRS-designated partnership 

representative is premised on the fact 

that the partnership has not properly 

designated a partnership representative 

on its own. If the IRS has to make a 

designation, the partnership has either 

failed to designate its own choice for 

partnership representative or has made 

multiple revocations. 

Allowing the partnership to 

unilaterally revoke a partnership 

representative that had been designated 

by the IRS undermines the purpose of 

the IRS designation. For an 

administrative proceeding to function 

properly and without delay and for the 

partnership to be represented in that 

administrative proceeding, a person 

who can act for the partnership and who 

is an eligible partnership representative 

must be designated. Additionally, 

because the IRS only designates a 

partnership representative when a 

partnership has failed to properly make 

its own designation, the partnership is 

ultimately in control over whether the 

IRS will need to designate a partnership 

representative. Consequently, the final 

regulations retain the rule that a 

partnership may revoke a partnership 

representative designated by the IRS 

only with the consent of the IRS, and 

the comments were not adopted. 

D. Authority of the Partnership 

Representative 

i. Binding Effect of Actions Taken by the 

Partnership Representative 

One comment suggested that, given 

that partnerships are formed under state 

law, state law should control the 

designation and authority of the 

partnership representative. Another 

comment suggested that the final 

regulations should clarify that the 

principles of agency law apply to the 

partnership representative, and that the 

partnership representative ‘‘will be 

operating as the agent on behalf of the 

partnership subject to the same control 

by the partnership as any principal 

would have over an agent.’’ These 

comments relate to proposed 

§ 301.6223–2(c), which provided that no 

state law, partnership agreement, or 

other document could limit the 

authority of the partnership 

representative. Because the authority of 

the partnership representative under 

federal law preempts any state law 

requirements these comments were not 

adopted. The language of § 301.6223– 

2(d) (which corresponds with proposed 

§ 301.6223–2(c)) has been revised to 

clarify that this rule is applicable only 

with respect to the centralized 

partnership audit regime. Accordingly, 

the final regulations provide that the 

failure to adhere to state law 

requirements has no effect on actions 

taken by the partnership representative 

with respect to the centralized 

partnership regime. 

The regulations are drafted to provide 

significant flexibility to the partnership 

to determine who will represent it and 

for the partnership and the partnership 

representative to negotiate the terms of 

their relationship. The Treasury 

Department and the IRS have attempted 

to refrain from creating unnecessary 

regulatory burdens. The partnership and 

the partnership representative are free to 

enter into contractual agreements to 

define the scope and limits of their 

relationship. However, because the IRS 

is not a party to these agreements, it is 

not bound by them. Any remedy the 

partnership would have against the 


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partnership representative if the 

partnership representative failed to act 

in accordance with those agreements 

would be under state law with respect 

to the partnership representative. 

Section 301.6223–2(d) is not intended 

to prevent partnerships from taking 

advantage of state law remedies for 

partnerships who wish to restrict a 

partnership representative’s authority 

under state law. Rather, the regulations 

leave the enforcement of such 

restrictions to the relevant parties, 

which simplifies the administrative 

proceeding consistent with the design of 

the centralized partnership audit 

regime. Under TEFRA, significant 

resources were often expended by the 

IRS and the partnership to determine 

what state law restrictions might affect 

who could act for the partnership and 

under what circumstances. The 

centralized partnership audit regime 

removes this aspect of TEFRA. 

ii. Authority 

One comment recommended that 

where there is a question regarding a 

person’s authority to serve as the 

partnership representative, the 

partnership should provide a notice 

signed by all the partners in the 

partnership as conclusive evidence that 

a particular person has the authority to 

serve as the partnership representative. 

This comment was not adopted because 

under section 6223 the authority of a 

person to act as partnership 

representative is based on whether the 

person was properly designated as the 

partnership representative in 

accordance with section 6223 and the 

regulations, not on whether state law or 

notice from the partners confirms such 

authority. 

One comment suggested that 

clarifying language be added to the end 

of a sentence in § 301.6223–2(a) 

providing that a notice of final 

partnership adjustment is final when 

not contested by the partnership 

representative ‘‘on behalf of the 

partnership.’’ The Treasury Department 

and the IRS agree that as drafted 

§ 301.6223–2(a) was confusing. It is the 

partnership that contests the notice of 

final partnership adjustment, even if it 

does so through the partnership 

representative. Accordingly, the final 

regulations clarify this language by 

revising § 301.6223–2(a) to remove the 

reference to the partnership 

representative. 

E. Other Comments and Changes 

A comment recommended that 

proposed § 301.6223–2 be clarified to 

provide that a partnership 

representative may engage a person to 

act on behalf of the partnership 

representative under a power of attorney 

during the administrative proceeding 

(referred to as a ‘‘POA’’) and that the 

POA can participate in meetings or 

receive copies of correspondence. 

Nothing in the regulations prevents the 

partnership representative from 

engaging a POA for this purpose. 

Language has been added to § 301.6223– 

2(d) to clarify this issue. Language has 

also been added to § 301.6223–1(a) to 

clarify that appointment of a POA does 

not designate the POA as partnership 

representative. 

A new paragraph (c) has been added 

to the final regulations to address the 

effect of withdrawal of a NAP on actions 

taken by a partnership representative. 

Proposed § 301.6231–1(f) (December 19 

NPRM) allows the IRS to withdraw a 

NAP after it has been issued. Proposed 

§ 301.6231–1(f) further provides that the 

withdrawn NAP has no effect for 

purposes of the centralized partnership 

audit regime. 

The partnership representative may 

have taken actions before withdrawal of 

the NAP. In addition, after the NAP has 

been issued, but before the NAP has 

been withdrawn, the partnership 

representative may have changed. 

Section 301.6223–2(c) has been added 

to the final regulations to clarify that 

even though the withdrawn NAP has no 

effect, any actions taken by a 

partnership representative (or successor 

partnership representative after a 

change in partnership representative 

that occurred after the issuance of the 

NAP and before the NAP was 

withdrawn) are binding on the 

partnership, even though the NAP has 

been withdrawn. An example was also 

added to illustrate this clarification 

under § 301.6223–2(c) regarding 

withdrawal of the NAP. See § 301.6223– 

2(e), Example 6. As a result of this new 

paragraph (c), proposed § 301.6223–2(c) 

was moved to § 301.6223–2(d). 

One comment suggested that a 

partnership representative should have 

to affirm that he or she will serve as the 

partnership representative by checking a 

box on the partnership return where the 

designation is made. The comment 

suggested that having such an 

affirmation will save time at the 

beginning of the administrative 

proceeding. 

Adopting this comment would not 

save time at the beginning of the 

administrative proceeding because even 

if the box was checked by the 

partnership representative at the time 

the return is filed, by the time the IRS 

commences the administrative 

proceeding, the partnership 

representative may no longer be 

available or willing to serve. Similarly, 

a partnership representative might 

erroneously not check the box at the 

time the return is filed but be willing to 

serve at the time the administrative 

proceeding commences. Whether the 

partnership representative checked the 

box at one point in time is not the right 

proxy for whether the partnership 

representative is willing to serve as the 

partnership representative at some other 

point in time. Rather than add this 

unnecessary requirement, the 

regulations provide that the person 

designated as the partnership 

representative is the partnership 

representative until there is a 

resignation, revocation, or the IRS 

determines no designation is in effect. 

Once the administrative proceeding 

begins, an unwilling partnership 

representative may resign or the 

partnership may revoke the partnership 

representative and designate a 

successor. Accordingly, this comment 

was not adopted. 

One comment suggested that the 

partnership representative be required 

to notify partners of significant 

developments (for example, extensions 

of the period of limitations, settlements, 

petitioning a court, etc.). There is no 

requirement in the statute for the 

partnership representative to notify any 

partner of significant developments. 

This is a departure from TEFRA, which 

required certain notifications and 

provided participation rights for certain 

partners. The proposed regulations 

adhered to the legislative judgment that 

the partnership representative is the 

sole representative of the partnership, 

and the actions of the partnership 

representative bind the partners. 

Nothing in the proposed regulations 

prevents the partnership from 

contracting with the partnership 

representative to require the partnership 

representative to notify the partnership 

or the partners of any developments, 

significant or otherwise. 

The Treasury Department and the IRS 

have determined that the government 

should not mandate how and when the 

partnership representative 

communicates with partners or other 

persons. By remaining silent on this 

issue, the regulations allow a 

partnership, its partners, and the 

partnership representative to arrange 

their own affairs without unnecessary 

regulatory requirements that interfere 

with these relationships. Accordingly, 

this comment was not adopted. 

Proposed § 1.6223–1(a) provided that 

a partnership representative must 

update the partnership representative’s 

contact information when such 

information changes as required by 


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39344 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 

forms, instructions, and other guidance 

prescribed by the IRS. One comment 

requested that a partnership 

representative only be required to 

update its contact information upon the 

selection of the partnership for an 

examination or the filing of an AAR. At 

this time, there is no requirement that 

the partnership representative update 

contact information prior to selection 

for examination or the filing of an AAR. 

Experience with the new regime may 

inform the Treasury Department and the 

IRS that updating contact information 

prior to selection for an examination or 

filing an AAR is helpful or important. 

The final regulations have been clarified 

to provide that contact information must 

be updated if required by forms, 

instructions, or other guidance 

published by the IRS. 

2. Election Into Centralized Partnership 

Audit Regime 

The Treasury Department and the IRS 

received no comments with respect to 

proposed § 301.9100–22 and made no 

substantive revisions to the proposed 

regulations. Accordingly, the final 

regulations adopt the proposed 

regulations without any substantive 

change. Minor editorial changes were 

made. The temporary regulations are 

removed. 

Special Analyses 

This regulation is not subject to 

review under section 6(b) of Executive 

Order 12866 pursuant to the 

Memorandum of Agreement (April 11, 

2018) between the Department of the 

Treasury and the Office of Management 

and Budget regarding review of tax 

regulations. Therefore, a regulatory 

impact assessment is not required. 

It is hereby certified that these rules 

will not have a significant economic 

impact on a substantial number of small 

entities. Although these rules may affect 

a substantial number of small entities, 

the economic impact is not substantial 

because these rules merely provide 

clarifying guidance on the statutory 

requirements to designate a partnership 

representative. These rules reduce the 

existing burden on partnerships to 

comply with the statutory requirements 

by providing clear rules and guidance 

regarding the statutory requirements for 

partnerships required to designate a 

partnership representative under section 

6223 and for partnerships to make an 

election for the centralized partnership 

audit regime to apply to taxable years 

beginning after November 2, 2015 and 

before January 1, 2018. For the reasons 

stated, the final rules will not have a 

significant economic impact on a 

substantial number of small entities. 

Accordingly, a regulatory flexibility 

analysis under the Regulatory 

Flexibility Act (5 U.S.C. Chapter 6) is 

not required. 

Pursuant to section 7805(f) of the 

Code, the notice of proposed rulemaking 

preceding these regulations was 

submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small business, and no 

comments were received. 

Statement of Availability of IRS 

Documents 

IRS Revenue Procedures, Revenue 

Rulings, Notices and other guidance 

cited in this preamble are published in 

the Internal Revenue Bulletin (or 

Cumulative Bulletin) and are available 

from the Superintendent of Documents, 

U.S. Government Publishing Office, 

Washington, DC 20402, or by visiting 

the IRS website at www.irs.gov. 

Drafting Information 

The principal authors of these final 

regulations are Joy E. Gerdy Zogby of 

the Office of the Associate Chief 

Counsel (Procedure and Administration) 

and Jennifer M. Black of the Office of 

the Associate Chief Counsel (Procedure 

and Administration). However, other 

personnel from the Treasury 

Department and the IRS participated in 

their development. 

List of Subjects in 26 CFR Part 301 

Employment taxes, Estate taxes, 

Excise taxes, Gift taxes, Income taxes, 

Penalties, Reporting and recordkeeping 

requirements. 

Adoption of Amendments to the 

Regulations 

Accordingly, 26 CFR part 301 is 

amended as follows: 

PART 301—PROCEDURE AND 

ADMINISTRATION 

■ Paragraph 1. The authority citation 

for part 301 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * *. 

■ Par. 2. Section 301.6223–1 is added to 

read as follows: 

§ 301.6223–1 Partnership representative. 

(a) Each partnership must have a 

partnership representative. A 

partnership subject to subchapter C of 

chapter 63 of the Internal Revenue Code 

(subchapter C of chapter 63) for a 

partnership taxable year must designate 

a partnership representative for the 

partnership taxable year in accordance 

with this section. There may be only 

one designated partnership 

representative for a partnership taxable 

year at any time. The designation of a 

partnership representative for a 

partnership taxable year under this 

section remains in effect until the date 

on which the designation of the 

partnership representative is terminated 

by valid resignation (as described in 

paragraph (d) of this section), valid 

revocation (as described in paragraph (e) 

of this section), or a determination by 

the Internal Revenue Service (IRS) that 

the designation is not in effect (as 

described in paragraph (f) of this 

section). A designation of a partnership 

representative for a partnership taxable 

year under paragraphs (e) or (f) of this 

section supersedes all prior designations 

of a partnership representative for that 

year. If required by forms, instructions, 

and other guidance prescribed by the 

IRS, a partnership representative must 

update the partnership representative’s 

contact information when such 

information changes. Only a person 

designated as a partnership 

representative in accordance with this 

section will be recognized as the 

partnership representative under section 

6223. A power of attorney (including a 

Form 2848, Power of Attorney) may not 

be used to designate a partnership 

representative. See § 301.6223–2(a), (b), 

and (c) with regard to the binding effect 

of actions taken by the partnership 

representative. See § 301.6223–2(d) with 

regard to the sole authority of the 

partnership representative to act on 

behalf of the partnership. See paragraph 

(f) of this section for rules regarding 

designation of a partnership 

representative by the IRS. 

(b) Eligibility to serve as a partnership 

representative—(1) In general. Any 

person (as defined in section 7701(a)(1)) 

that meets the requirements of 

paragraphs (b)(2) and (3) of this section, 

as applicable, is eligible to serve as a 

partnership representative, including a 

wholly owned entity disregarded as 

separate from its owner for federal tax 

purposes. A person designated under 

this section as partnership 

representative is deemed to be eligible 

to serve as the partnership 

representative unless and until the IRS 

determines that the person is ineligible. 

A partnership can designate itself as its 

own partnership representative 

provided it meets the requirements of 

paragraphs (b)(2) and (3) of this section. 

(2) Substantial presence in the United 

States. A person must have substantial 

presence in the United States to be the 

partnership representative. A person has 

substantial presence in the United 

States for the purposes of this section 

if— 


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(i) The person makes themselves 

available to meet in person with the IRS 

in the United States at a reasonable time 

and place as determined by the IRS in 

accordance with § 301.7605–1; and 

(ii) The person has a United States 

taxpayer identification number, a street 

address that is in the United States and 

a telephone number with a United 

States area code. 

(3) Eligibility of an entity to be a 

partnership representative—(i) In 

general. A person who is not an 

individual may be a partnership 

representative only if an individual who 

meets the requirements of paragraph 

(b)(2) of this section is appointed by the 

partnership as the sole individual 

through whom the partnership 

representative will act for all purposes 

under subchapter C of chapter 63. A 

partnership representative meeting the 

requirements of this paragraph (b)(3) is 

an entity partnership representative, 

and the individual through whom such 

entity partnership representative acts is 

the designated individual. Designated 

individual status automatically 

terminates on the date that the 

designation of the entity partnership 

representative for which the designated 

individual was appointed is no longer 

in effect in accordance with paragraph 

(d), (e), or (f) of this section. 

(ii) Appointment of a designated 

individual. A designated individual 

must be appointed by the partnership at 

the time of the designation of the entity 

partnership representative in the 

manner prescribed by the IRS in forms, 

instructions, and other guidance. 

Accordingly, if the entity partnership 

representative is designated on the 

partnership return for the taxable year 

in accordance with paragraph (c)(2) of 

this section, the designated individual 

must be appointed by the partnership at 

that time. Similarly, if the entity 

partnership representative is designated 

under paragraph (e) of this section 

(regarding revocation and subsequent 

designation after revocation of a 

partnership representative), the 

designated individual must be 

appointed at that time. If the 

partnership fails to appoint a designated 

individual at the time and in the 

manner set forth in this paragraph 

(b)(3)(ii), the IRS may determine that the 

entity partnership representative 

designation is not in effect under 

paragraph (f) of this section. 

(4) Examples. The following examples 

illustrate the rules of this paragraph (b). 

Example 1. Partnership designates PR as 

its partnership representative for its 2018 tax 

year on its timely filed 2018 partnership 

return. The IRS initiates an administrative 

proceeding with respect to Partnership’s 

2018 tax year. PR has a United States 

taxpayer identification number, a United 

States street address, and a phone number 

with a United States area code. The IRS 

contacts PR and requests an in-person 

meeting with respect to the administrative 

proceeding. PR works with the IRS and 

agrees to meet. PR has substantial presence 

in the United States because she meets all the 

requirements under paragraph (b)(2) of this 

section. 

Example 2. The facts are the same as in 

Example 1 of this paragraph (b)(4), except 

that PR is an entity and Partnership 

appointed DI, a designated individual to act 

on behalf of PR for its 2018 tax year on its 

timely filed 2018 partnership return. DI has 

a United States taxpayer identification 

number and a phone number with a United 

States area code. However, the address 

provided for DI is not a United States 

address. Accordingly, PR is not an eligible 

partnership representative because PR is an 

entity and DI does not satisfy the 

requirements of paragraph (b)(3)(i) of this 

section. Although DI does not have 

substantial presence in the United States 

under paragraph (b)(2) of this section and 

therefore PR is not an eligible partnership 

representative, until there is a resignation or 

revocation under paragraph (d) or (e) of this 

section or until the IRS determines the 

partnership representative designation is no 

longer in effect under paragraph (f) of this 

section, the designation of PR as the 

partnership representative remains in effect 

in accordance with paragraph (a) of this 

section, and Partnership and all its partners 

are bound by the actions of PR as the 

partnership representative. 

Example 3. The facts are the same as in 

Example 1 of this paragraph (b)(4), except PR 

works in a foreign country and spends the 

majority of her time there. Unless PR 

otherwise fails to meet one of the 

requirements under paragraph (b)(2) of this 

section, PR has substantial presence in the 

United States. However, even if PR fails to 

meet one of the requirements under 

paragraph (b)(2) of this section, until there is 

a resignation or revocation under paragraph 

(d) or (e) of this section or until the IRS 

determines the partnership representative 

designation is no longer in effect under 

paragraph (f) of this section, the designation 

of PR as the partnership representative 

remains in effect in accordance with 

paragraph (a) of this section, and Partnership 

and all its partners are bound by the actions 

of PR as the partnership representative. 

(c) Designation of partnership 

representative by the partnership—(1) In 

general. The partnership must designate 

a partnership representative separately 

for each taxable year. The designation of 

a partnership representative for one 

taxable year is effective only for the 

taxable year for which it is made. 

(2) Designation. Except in the case of 

a designation of a partnership 

representative (and the appointment of 

the designated individual, if applicable) 

after an event described in paragraph (d) 

of this section (regarding resignation), 

paragraph (e) of this section (regarding 

revocation by the partnership), or 

paragraph (f) of this section (regarding 

designation made by the IRS), or except 

as prescribed in forms, instructions, and 

other guidance, designation of a 

partnership representative (and the 

appointment of the designated 

individual, if applicable) must be made 

on the partnership return for the 

partnership taxable year to which the 

designation relates and must include all 

of the information required by forms, 

instructions, and other guidance, 

including information about the 

designated individual if paragraph (b)(3) 

of this section applies. The designation 

of the partnership representative (and 

the appointment of the designated 

individual, if applicable) is effective on 

the date that the partnership return is 

filed. 

(3) Example. The following example 

illustrates the rules of this paragraph (c). 

Example. Partnership properly designates 

PR1 as its partnership representative for 

taxable year 2018 on its 2018 partnership 

return. Partnership designates PR2 as its 

partnership representative for taxable year 

2021 on its 2021 partnership return. In 2022, 

the IRS mails Partnership a notice of 

administrative proceeding under section 

6231(a)(1) with respect to Partnership’s 2018 

taxable year. PR1 is the partnership 

representative for the 2018 partnership 

taxable year, notwithstanding the designation 

of PR2 as partnership representative for the 

2021 partnership taxable year. 

(d) Resignations—(1) In general. A 

partnership representative or designated 

individual may resign as partnership 

representative or designated individual, 

as applicable, for a partnership taxable 

year for any reason by notifying the IRS 

in writing of the resignation in 

accordance with forms, instructions, 

and other guidance prescribed by the 

IRS. A resigning partnership 

representative may not designate a 

successor partnership representative. A 

resigning designated individual may not 

designate a successor designated 

individual or partnership 

representative. No later than 30 days 

after the IRS receives a written 

notification of resignation, the IRS will 

send written confirmation of receipt of 

the written notification to the 

partnership and the resigning 

partnership representative (to the 

attention of the designated individual if 

appropriate). A failure by the IRS to 

send any notification under this 

paragraph (d) does not invalidate a valid 

resignation made pursuant to this 

paragraph (d). A failure by the 

partnership representative (or 

designated individual, if the designated 

individual is the person resigning) to 


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satisfy the requirements of this 

paragraph (d) is treated as if there were 

no resignation, and the partnership 

representative designation (and 

designated individual appointment, if 

applicable) remains in effect until the 

designation (or appointment) is 

terminated by valid resignation (as 

described in this paragraph (d)), valid 

revocation by the partnership (as 

described in paragraph (e) of this 

section), or a determination by the IRS 

that the designation is not in effect (as 

described in paragraph (f) of this 

section). See § 301.6223–2 for binding 

nature of actions taken by the 

partnership representative or designated 

individual on behalf of a partnership 

representative, if applicable, prior to 

resignation. 

(2) Time for resignation. A 

partnership representative or designated 

individual may submit the written 

notification of resignation described in 

paragraph (d)(1) of this section to the 

IRS only after the IRS issues a notice of 

administrative proceeding (NAP) under 

section 6231(a)(1) for the partnership 

taxable year for which the partnership 

representative designation is in effect or 

at such other time as prescribed by the 

IRS in forms, instructions, or other 

guidance. If the IRS withdraws the NAP 

pursuant to § 301.6231–1(f), any valid 

resignation by the partnership 

representative or designated individual 

under this paragraph (d) prior to the 

withdrawal of the NAP remains in 

effect. 

(3) Effective date of resignation. A 

valid resignation is immediately 

effective upon the IRS’s receipt of the 

written notification described in 

paragraph (d)(1) of this section. As of 

the effective date of the resignation— 

(i) The resigning partnership 

representative (and designated 

individual, if applicable) may not take 

any action on behalf of the partnership 

with respect to the partnership taxable 

year affected by the resignation; 

(ii) The partnership representative 

designation is no longer in effect with 

respect to the partnership taxable year 

affected by the resignation; 

(iii) In the case of a resigning entity 

partnership representative, the 

appointment of the designated 

individual is no longer in effect with 

respect to the partnership taxable year 

affected by the resignation; and 

(iv) In the case of a resigning 

designated individual, the designation 

of the entity partnership representative 

is no longer in effect with respect to the 

partnership taxable year affected by the 

resignation. 

(e) Revocations—(1) In general. A 

partnership may revoke a designation of 

a partnership representative or 

appointment of a designated individual 

for a partnership taxable year for any 

reason by notifying the IRS in writing of 

the revocation in accordance with 

forms, instructions, and other guidance 

prescribed by the IRS. The partnership 

may make such revocation regardless of 

when and how the designation or 

appointment was made, except as 

provided in paragraph (e)(6) of this 

section (regarding designation by the 

IRS). The revocation must include the 

designation of a successor partnership 

representative (and the appointment of 

a designated individual, if applicable). 

In the case of a revocation of only the 

designated individual appointment, the 

partnership must designate a successor 

designated individual. No later than 30 

days after the IRS receives a written 

notification of revocation submitted at 

the time described in paragraph (e)(2) of 

this section, the IRS will send written 

confirmation of receipt of the written 

notification to the partnership, the 

revoked partnership representative or, 

in the case of a revocation of only the 

appointment of a designated individual, 

to the revoked designated individual, 

and to the newly designated partnership 

representative. In the case of a 

revocation of an entity partnership 

representative, the notification will be 

sent to the entity partnership 

representative, to the attention of the 

designated individual. A failure by the 

IRS to send any notification under this 

paragraph (e) does not invalidate a valid 

revocation made pursuant to this 

paragraph (e). A failure by the 

partnership to satisfy the requirements 

of this paragraph (e), including failure to 

designate a successor, is treated as if no 

revocation has occurred and the 

partnership representative designation 

(and designated individual 

appointment, if applicable) remains in 

effect until the designation (or 

appointment) is terminated either by 

valid resignation (as described in 

paragraph (d) of this section), valid 

revocation by the partnership (as 

described in this paragraph (e)), or 

determination by the IRS that the 

designation is not in effect (as described 

in paragraph (f) of this section). See 

§ 301.6223–2 for binding nature of 

actions taken by the partnership 

representative or designated individual 

on behalf of a partnership 

representative, if applicable, prior to 

revocation. 

(2) Time for revocation—(i) 

Revocation during an administrative 

proceeding. Except as provided in 

paragraph (e)(2)(ii) of this section or in 

forms, instructions, or other guidance 

prescribed by the IRS, a partnership 

may revoke a designation of a 

partnership representative or 

appointment of a designated individual 

only after the IRS issues a notice of 

selection for examination or a NAP 

under section 6231(a)(1) for the 

partnership taxable year for which the 

designation or appointment is in effect. 

If the IRS withdraws the NAP pursuant 

to § 301.6231–1(f), any valid revocation 

of a partnership representative 

designation or designated individual 

appointment under this paragraph (e) 

prior to the withdrawal of the NAP 

remains in effect. 

(ii) Revocation with an AAR. The 

partnership may revoke a designation of 

a partnership representative or 

appointment of a designated individual 

for the taxable year prior to receiving a 

notice of selection for examination or a 

NAP by filing a valid administrative 

adjustment request (AAR) in accordance 

with section 6227 for a partnership 

taxable year. A partnership may not use 

the form prescribed by the IRS for filing 

an AAR solely for the purpose of 

revoking a designation of a partnership 

representative or appointment of a 

designated individual. See § 301.6227–1 

for the rules regarding the time and 

manner of filing an AAR. 

(3) Effective date of revocation. Except 

as described in paragraph (e)(6)(ii) of 

this section (regarding the effective date 

of a revocation of a partnership 

representative designated by the IRS 

under paragraph (f)(5) of this section), a 

valid revocation is immediately 

effective upon the IRS’s receipt of the 

written notification described in 

paragraph (e)(1) of this section. A 

revocation of a partnership 

representative designation and a 

designation of a new partnership 

representative (and appointment of a 

new designated individual, if 

applicable) is effective on the date the 

partnership files a valid AAR. Similarly, 

a revocation of a designated individual 

appointment and appointment of a new 

designated individual is effective on the 

date the partnership files a valid AAR. 

As of the effective date of the 

revocation— 

(i) The revoked partnership 

representative (and designated 

individual, if applicable) may not take 

any action on behalf of the partnership 

with respect to the partnership taxable 

year affected by the revocation; 

(ii) The designation of the revoked 

partnership representative is no longer 

in effect, and the successor partnership 

representative designation (and 

designated individual appointment, if 

applicable) is in effect with respect to 


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Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 39347 

the partnership taxable year affected by 

the revocation; 

(iii) In the case of a revoked entity 

partnership representative, the 

appointment of the designated 

individual is no longer in effect with 

respect to the partnership taxable year 

affected by the revocation; and 

(iv) In the case of a revoked 

designated individual where the 

designation of the entity partnership 

representative has not been revoked, the 

revoked designated individual may not 

take any action on behalf of the 

partnership with respect to the 

partnership taxable year affected by the 

revocation, the appointment of the 

revoked designated individual is no 

longer in effect, and the appointment of 

the successor designated individual is 

in effect. 

(4) Partners who may sign revocation. 

A revocation under this paragraph (e) 

must be signed by a person who was a 

partner at any time during the 

partnership taxable year to which the 

revocation relates or as provided in 

forms, instructions, and other guidance 

prescribed by the IRS. 

(5) Form of the revocation. The 

written notification of revocation 

described in paragraph (e)(1) of this 

section must include the items 

described in this paragraph (e)(5). A 

notification of revocation described in 

paragraph (e)(1) of this section that does 

not include each of the following items 

is not a valid revocation: 

(i) A certification under penalties of 

perjury that the person signing the 

notification is a partner described in 

paragraph (e)(4) of this section 

authorized by the partnership to revoke 

the designation of the partnership 

representative (or appointment of the 

designated individual, if applicable). 

(ii) A statement that the person 

signing the notification is revoking the 

designation of the partnership 

representative (or appointment of the 

designated individual, if applicable); 

(iii) A designation of a successor 

partnership representative (and 

appointment of a designated individual, 

if applicable) in accordance with this 

section and forms, instructions, and 

other guidance prescribed by the IRS; 

and 

(iv) In the case of a revocation of an 

appointment of a designated individual, 

appointment of a successor designated 

individual in accordance with this 

section and forms, instructions, and 

other guidance prescribed by the IRS. 

(6) Partnership representative 

designated by the IRS—(i) In general. If 

a partnership representative is 

designated (and a designated individual 

is appointed, if applicable) by the IRS 

pursuant to paragraph (f)(5) of this 

section, the partnership may only 

revoke that designation (or the 

appointment of the designated 

individual, if applicable) with the 

permission of the IRS, which the IRS 

will not unreasonably withhold. 

(ii) Effective date of revocation. The 

effective date of any revocation 

submitted in accordance with paragraph 

(e)(6)(i) of this section is the date on 

which the IRS sends notification that 

the revocation is valid. 

(7) Multiple revocations—(i) In 

general. The IRS may determine that a 

designation is not in effect under 

paragraph (f) of this section if: 

(A) The IRS receives a revocation of 

a designation of a partnership 

representative or appointment of a 

designated individual, and 

(B) Within the 90-day period prior to 

the date the revocation described in 

paragraph (e)(7)(i)(A) of this section was 

received, the IRS received another 

revocation for the same partnership 

taxable year. 

(ii) Time limitation. The IRS may not 

determine that a designation is not in 

effect in accordance with paragraph 

(e)(7)(i) of this section later than 90 days 

after the IRS’s receipt of the revocation 

described in paragraph (e)(7)(i)(A) of 

this section. 

(8) Examples. The following examples 

illustrate the rules of this paragraph (e). 

Example 1. Partnership properly 

designates PR, an individual, as partnership 

representative for its 2018 taxable year on its 

timely filed 2018 partnership return. In 2020, 

Partnership mails written notification to the 

IRS to revoke designation of PR as its 

partnership representative for Partnership’s 

2018 taxable year. The revocation is not 

made in connection with an AAR for 

Partnership’s 2018 taxable year, and the IRS 

has not mailed Partnership a notice of 

selection for examination or a NAP under 

section 6231(a)(1) with respect to 

Partnership’s 2018 taxable year. Because the 

revocation was not made when permitted 

under paragraph (e)(2) of this section, the 

revocation is not effective and B remains the 

partnership representative for Partnership’s 

2018 taxable year unless and until B’s status 

as partnership representative is properly 

revoked under paragraph (e) of this section 

or terminated in accordance with paragraph 

(d) (regarding resignation) or (f) (regarding 

IRS designation) of this section. 

Example 2. During an administrative 

proceeding with respect to Partnership’s 

2018 taxable year, Partnership provides the 

IRS with written notification to revoke its 

designation of PR, an individual, as its 

partnership representative for the 2018 

taxable year. The written notification does 

not include a designation of a new 

partnership representative for Partnership’s 

2018 taxable year. Because the revocation 

does not include a designation of a new 

partnership representative as required under 

paragraph (e)(1) of this section, the 

revocation is not effective and PR remains 

the partnership representative for 

Partnership’s 2018 taxable year unless and 

until B’s status as partnership representative 

is properly revoked under paragraph (e) of 

this section or terminated in accordance with 

paragraph (d) (regarding resignation) or (f) 

(regarding IRS designation) of this section. 

(f) Designation of the partnership 

representative by the IRS—(1) In 

general. If the IRS determines that a 

designation of a partnership 

representative is not in effect for a 

partnership taxable year in accordance 

with paragraph (f)(2) of this section, the 

IRS will notify the partnership that a 

partnership representative designation 

is not in effect. The IRS will also notify 

the most recent partnership 

representative for the partnership 

taxable year, except as described in 

paragraph (f)(2)(iii) of this section. In 

the case of an entity partnership 

representative, the notification will be 

sent to the entity partnership 

representative, to the attention of the 

designated individual. The 

determination that a designation is not 

in effect is effective on the date the IRS 

mails the notification. Except as 

described in paragraph (f)(4) of this 

section, the partnership may designate, 

in accordance with paragraph (f)(3) of 

this section, a successor partnership 

representative (and designated 

individual, if applicable) eligible under 

paragraph (b) of this section within 30 

days of the date the IRS mails the 

notification. In the case of a resignation 

of a partnership representative, this 

notification may include the written 

confirmation of receipt described in 

paragraph (d)(1) of this section. See 

paragraph (f)(2)(iv) of this section. If the 

partnership does not designate a 

successor within 30 days from the date 

of IRS notification, the IRS will 

designate a partnership representative 

in accordance with paragraph (f)(5) of 

this section. A partnership 

representative designation made in 

accordance with paragraphs (c), (e), or 

(f) of this section remains in effect until 

the IRS determines the designation is 

not in effect. See § 301.6223–2 for 

binding nature of actions taken by the 

partnership representative or designated 

individual on behalf of a partnership 

representative, if applicable, prior to a 

determination by the IRS that the 

designation is not in effect. 

(2) IRS determination that partnership 

representative designation not in effect. 

The IRS may, but is not required to, 

determine that a partnership 

representative designation is not in 

effect. The IRS is not obligated to search 

for or otherwise seek out information 


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39348 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 

related to the circumstances in which 

the IRS may determine a partnership 

representative designation is not in 

effect, and the fact that the IRS is aware 

of any such circumstances does not 

obligate the IRS to determine that a 

partnership representative designation 

is not in effect. The IRS may determine 

that the partnership representative 

designation is not in effect if the IRS 

determines that— 

(i) The partnership representative or 

the designated individual does not have 

substantial presence as described in 

paragraph (b)(2) of this section; 

(ii) The partnership failed to appoint 

a designated individual as described in 

paragraph (b)(3) of this section, as 

applicable; 

(iii) The partnership failed to make a 

valid designation as described in 

paragraph (c) of this section; 

(iv) The partnership representative or 

designated individual resigns as 

described in paragraph (d) of this 

section; 

(v) The partnership has made 

multiple revocations as described in 

paragraph (e)(7) of this section; or 

(vi) The partnership representative 

designation is no longer in effect as 

described in other published guidance. 

(3) Designation by the partnership 

during the 30-day period. Designation of 

a partnership representative (and 

appointment of a designated individual, 

if applicable) by the partnership during 

the 30-day period described in 

paragraph (f)(1) of this section must be 

made in accordance with forms, 

instructions, and other guidance 

prescribed by the IRS. If the partnership 

fails to provide all information required 

by forms, instructions, and other 

guidance, the partnership will have 

failed to make a designation (and 

appointment, if applicable). If the 

partnership does not fully comply with 

the requirement of this paragraph (f)(3) 

within the 30-day period described in 

paragraph (f)(1) of this section, the IRS 

will designate a partnership 

representative (and appoint a designated 

individual, if applicable). 

(4) No opportunity for designation by 

the partnership in the case of multiple 

revocations. In the event that the IRS 

determines a partnership representative 

designation is not in effect due to 

multiple revocations as described in 

paragraph (e)(7) of this section, the 

partnership will not be given an 

opportunity to designate the successor 

partnership representative prior to the 

designation by the IRS as described in 

paragraph (f)(5) of this section. 

However, see paragraph (e)(6) of this 

section regarding revocation of a 

partnership representative designated 

by the IRS. 

(5) Designation by the IRS—(i) In 

general. The IRS designates a 

partnership representative under this 

paragraph (f)(5) by notifying the 

partnership of the name, address, and 

telephone number of the new 

partnership representative. If the IRS 

designates an entity partnership 

representative, the IRS will also appoint 

a designated individual to act on behalf 

of the entity partnership representative. 

The designation of a partnership 

representative (and appointment of a 

designated individual, if applicable) by 

the IRS is effective on the date on which 

the IRS mails the notification of the 

designation (and appointment, if 

applicable) to the partnership. The IRS 

will also mail a copy of the notification 

of the designation (and appointment, if 

applicable) to the new partnership 

representative (through the new 

designated individual, if applicable) 

that has been designated (and 

appointed, if applicable) by the IRS 

under this section. 

(ii) Factors considered when 

partnership representative designated 

by the IRS. The IRS will ordinarily 

consider one or more of the factors set 

forth in this paragraph (f)(5)(ii) when 

determining whom to designate as 

partnership representative. No single 

factor is determinative, and other than 

as described in paragraph (f)(5)(iii) of 

this section, the IRS may exercise its 

discretion to designate a person as 

partnership representative even if none 

of the factors are applicable to such 

person. The factors are not requirements 

for eligibility to be designated by the 

IRS as partnership representative; the 

only requirements for eligibility are 

described under paragraph (b) of this 

section. The IRS is not obligated to 

search for or otherwise seek out 

information related to the factors, and 

the fact that the IRS is aware of any 

information related to such factors does 

not obligate the IRS to designate a 

particular person. Although the IRS may 

designate any person to be the 

partnership representative, a principal 

consideration in determining whom to 

designate as a partnership 

representative is whether there is a 

reviewed year partner that is eligible to 

serve as the partnership representative 

in accordance with paragraph (b)(1) of 

this section or whether there is a partner 

at the time the partnership 

representative designation is made that 

is eligible to serve as the partnership 

representative. Other factors that will 

ordinarily be considered by the IRS in 

determining whom to designate as a 

partnership representative include, but 

are not limited to: 

(A) The views of the partners having 

a majority interest in the partnership 

regarding the designation; 

(B) The general knowledge of the 

person in tax matters and the 

administrative operation of the 

partnership; 

(C) The person’s access to the books 

and records of the partnership; 

(D) Whether the person is a United 

States person (within the meaning of 

section 7701(a)(30)); and 

(E) The profits interest of the partner 

in the case of a partner. 

(iii) IRS employees. The IRS will not 

designate a current employee, agent, or 

contractor of the IRS as the partnership 

representative unless that employee, 

agent, or contractor was a reviewed year 

partner or is currently a partner in the 

partnership. 

(6) Examples. The following examples 

illustrate the rules of this paragraph (f). 

Example 1. The IRS determines that 

Partnership has designated a partnership 

representative that does not have substantial 

presence in the United States as defined in 

paragraph (b)(2) of this section. The IRS may, 

but is not required to, determine that the 

designation is not in effect and designate a 

new partnership representative after 

following the procedures in this paragraph 

(f). 

Example 2. Partnership designates as its 

partnership representative a corporation but 

fails to appoint a designated individual to act 

on behalf of the corporation as required 

under paragraph (b)(3) of this section. The 

IRS may, but is not required to, determine 

that the partnership representative 

designation is not in effect and may designate 

a new partnership representative after 

following the procedures in this paragraph 

(f). 

Example 3. The partnership representative 

resigns pursuant to paragraph (d) of this 

section. The IRS mails Partnership a 

notification informing Partnership that no 

designation is in effect and that the IRS plans 

to designate a new partnership 

representative. Partnership fails to respond 

within 30 days of the date the IRS mails the 

notification. The IRS must designate a 

partnership representative pursuant to this 

paragraph (f). 

Example 4. Partnership designated on its 

partnership return a partnership 

representative, PR1. After Partnership 

received a NAP, Partnership submits to the 

IRS the form described in paragraph (e)(4) of 

this section requesting the revocation of 

PR1’s designation as partnership 

representative and designating PR2 as the 

partnership representative. Sixty days later, 

Partnership signs and submits a form 

described in paragraph (e)(4) of this section 

requesting the revocation of PR2’s 

designation as partnership representative and 

designating PR3 as the partnership 

representative. The IRS accepts the 

revocation of PR2 and designation of PR3 as 


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valid and effective upon receipt pursuant to 

paragraph (e)(3) of this section. However, 

because PR2’s revocation was within 90 days 

of PR1’s revocation, the IRS may determine 

within 90 days of IRS’s receipt of PR2’s 

revocation, pursuant to paragraphs (e)(7) and 

(f)(2) of this section, that there is no 

designation in effect due to multiple 

revocations. The IRS may then designate a 

new partnership representative pursuant to 

this paragraph (f) without allowing 

Partnership an opportunity to designate a 

partnership representative within the 30-day 

period described in paragraph (f)(1) of this 

section. 

(g) Reliance on forms required by this 

section. The IRS may rely on any form 

or other document filed or submitted 

under this section as evidence of the 

designation, resignation, or revocation 

on such form and as evidence of the 

date on which such form was filed or 

submitted relating to a designation, 

resignation, or revocation. 

(h) Applicability date—(1) In general. 

Except as provided in paragraph (h)(2) 

of this section, this section applies to 

partnership taxable years beginning 

after December 31, 2017. 

(2) Election under § 301.9100–22 in 

effect. This section applies to any 

partnership taxable years beginning 

after November 2, 2015 and before 

January 1, 2018 for which a valid 

election under § 301.9100–22 is in 

effect. 

■ Par. 3. Section 301.6223–2 is added to 

read as follows: 

§ 301.6223–2 Binding effect of actions of 

the partnership and partnership 

representative. 

(a) Binding nature of actions by 

partnership and final decision in a 

partnership proceeding. The actions of 

the partnership and the partnership 

representative taken under subchapter C 

of chapter 63 of the Internal Revenue 

Code (subchapter C of chapter 63) and 

any final decision in a proceeding 

brought under subchapter C of chapter 

63 with respect to the partnership bind 

the partnership, all partners of the 

partnership (including partnershippartners as defined in § 301.6241–1(a)(7) 

that have a valid election under section 

6221(b) in effect for any taxable year 

that ends with or within the taxable year 

of the partnership), and any other 

person whose tax liability is determined 

in whole or in part by taking into 

account directly or indirectly 

adjustments determined under 

subchapter C of chapter 63 (for example, 

indirect partners as defined in 

§ 301.6241–1(a)(4)). For instance, a 

settlement agreement entered into by 

the partnership representative on behalf 

of the partnership, a notice of final 

partnership adjustment (FPA) with 

respect to the partnership that is not 

contested by the partnership, or the 

final decision of a court with respect to 

the partnership if the FPA is contested, 

binds all persons described in the 

preceding sentence. 

(b) Actions by the partnership 

representative before termination of 

designation. A termination of the 

designation of a partnership 

representative because of a resignation 

under § 301.6223–1(d) or a revocation 

under § 301.6223–1(e), or as a result of 

a determination by the Internal Revenue 

Service (IRS) under § 301.6223–1(f) that 

the designation is not in effect, does not 

affect the validity of any action taken by 

that partnership representative during 

the period prior to such termination. For 

example, if a partnership representative 

properly designated under § 301.6223–1 

consented to an extension of the period 

of limitations on making adjustments 

under section 6235(b) in accordance 

with § 301.6235–1(d), that extension 

remains valid even after termination of 

the designation of that partnership 

representative. 

(c) Actions by the partnership 

representative upon withdrawal of 

notice of administrative proceeding. If 

the IRS issues a notice of administrative 

proceeding (NAP) under section 

6231(a)(1) and subsequently withdraws 

such NAP pursuant to § 301.6231–1(f), 

any actions taken by a partnership 

representative (or successor partnership 

representative after a change to the 

partnership representative that occurred 

after the issuance of the NAP and before 

the NAP was withdrawn) are binding as 

described in paragraph (a) of this 

section even though the NAP has been 

withdrawn and has no effect for 

purposes of subchapter C of chapter 63. 

(d) Partnership representative has the 

sole authority to act on behalf of the 

partnership—(1) In general. The 

partnership representative has the sole 

authority to act on behalf of the 

partnership for all purposes under 

subchapter C of chapter 63. In the case 

of an entity partnership representative, 

the designated individual has the sole 

authority to act on behalf of the 

partnership representative and the 

partnership. Except for a partner that is 

the partnership representative or the 

designated individual, no partner, or 

any other person, may participate in an 

administrative proceeding without the 

permission of the IRS. The failure of the 

partnership representative to follow any 

state law, partnership agreement, or 

other document or agreement has no 

effect on the authority of the partnership 

representative or the designated 

individual as described in section 6223, 

§ 301.6223–1, and this section. Nothing 

in this section affects, or otherwise 

restricts, the ability of a partnership 

representative to authorize a person to 

represent the partnership representative, 

in the partnership representative’s 

capacity as the partnership 

representative, before the IRS under a 

valid power of attorney in a proceeding 

involving the partnership under 

subchapter C of chapter 63. 

(2) Designation provides authority to 

bind the partnership—(i) Partnership 

representative. A partnership 

representative, by virtue of being 

designated under section 6223 and 

§ 301.6223–1, has the authority to bind 

the partnership for all purposes under 

subchapter C of chapter 63. 

(ii) Designated individual. A 

partnership that is required to appoint 

a designated individual described under 

§ 301.6223–1(b)(3)(i) acts through such 

designated individual. By virtue of 

being appointed as part of the 

designation of the partnership 

representative under § 301.6223–1, the 

designated individual has the sole 

authority to bind the partnership 

representative and therefore the 

partnership, its partners, and any other 

person as described in paragraph (a) of 

this section for all purposes under 

subchapter C of chapter 63 so long as 

the partnership representative 

designation and designated individual 

appointment are in effect. 

(e) Examples. The following examples 

illustrate the rules of this section. 

Example 1. Partnership designates a 

partnership representative, PR, on its timely 

filed partnership return for 2020. PR is a 

partner in Partnership. The partnership 

agreement for Partnership includes a clause 

that requires PR to consult with an identified 

management group of partners in Partnership 

before taking any action with respect to an 

administrative proceeding before the IRS. 

The IRS initiates an administrative 

proceeding with respect to Partnership’s 

2020 taxable year. During the course of the 

administrative proceeding, PR consents to an 

extension of the period of limitations on 

making adjustments under section 6235(b) 

allowing additional time for the IRS to mail 

an FPA. PR failed to consult with the 

management group of partners prior to 

agreeing to this extension of time. PR’s 

consent provided to the IRS to extend the 

time period is valid and binding on 

Partnership because, pursuant to section 

6223, PR, as the designated partnership 

representative, has authority to bind 

Partnership and all its partners. 

Example 2. Partnership designates a 

partnership representative, PR, on its timely 

filed partnership return for 2020. PR is not 

a partner in Partnership. During an 

administrative proceeding with respect to 

Partnership’s 2020 taxable year, PR agrees to 

certain partnership adjustments and within 

45 days after the issuance of the FPA elects 

the alternative to payment of the imputed 


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39350 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 

underpayment under section 6226. Certain 

partners in Partnership challenge the actions 

taken by PR during the administrative 

proceeding and the validity of the section 

6226 statements furnished to those partners, 

alleging that PR was never authorized to act 

on behalf of Partnership under state law or 

the partnership agreement. Because PR was 

designated by Partnership as the partnership 

representative under section 6223 and this 

section, PR was authorized to act on behalf 

of Partnership for all purposes under 

subchapter C of chapter 63, and the IRS may 

rely on that designation as conclusive 

evidence of PR’s authority to act on behalf of 

Partnership. 

Example 3. Partnership designates an 

entity partnership representative, EPR, and 

appoints an individual, A, as the designated 

individual on its timely filed partnership 

return for 2020. EPR is a C corporation. A is 

unaffiliated with EPR and is not an officer, 

director, or employee of EPR. During an 

administrative proceeding with respect to 

Partnership’s 2020 taxable year, A, acting for 

EPR, agrees to an extension of the period of 

limitations on making adjustments under 

section 6235(b) from March 15, 2024 to 

December 31, 2024. The IRS mails an FPA 

with respect to the 2020 partnership taxable 

year on December 13, 2024, before expiration 

of the extended period of limitations on 

making adjustments as agreed to by EPR, but 

after the expiration of the unextended period 

of limitations on making adjustments. 

Partnership challenges the FPA as untimely, 

alleging that A was not authorized under 

state law to act on behalf of EPR and thus the 

extension agreement was invalid. Because A 

was appointed by the partnership as the 

designated individual to act on behalf of EPR, 

A was authorized to act on behalf of EPR for 

all purposes under subchapter C of chapter 

63, and the IRS may rely on that appointment 

as conclusive evidence of A’s authority to act 

on behalf of EPR and Partnership. 

Example 4. The partnership 

representative, PR, consents to an extension 

of the period of limitations on making 

adjustments under section 6235(b) and 

§ 301.6235–1(d) for Partnership for the 

partnership taxable year. After signing the 

consent, PR resigns as partnership 

representative in accordance with 

§ 301.6223–1(d). The consent to extend the 

period of limitations on making adjustments 

under section 6235(b) remains valid even 

after PR resigns. 

Example 5. Partnership designates a 

partnership representative who does not 

make themselves available to meet with the 

IRS in person in the United States as required 

by § 301.6223–1(b). Although the partnership 

representative does not have substantial 

presence in the United States within the 

meaning of § 301.6223–1(b)(2), until a 

termination occurs under § 301.6223–1(d) or 

(e) or the IRS determines the partnership 

representative designation is no longer in 

effect under § 301.6223–1(f), the partnership 

representative designation remains in effect, 

and Partnership and all its partners are 

bound by the actions of the partnership 

representative. 

Example 6. Partnership designates PR1 as 

the partnership representative on its timely 

filed partnership return for 2020. On 

September 1, 2022, the IRS sends a NAP for 

the 2020 taxable year to Partnership and PR, 

and Partnership revokes PR1’s designation 

and designates PR2 as the partnership 

representative in accordance with 

§ 301.6223–1(e). On November 1, 2023, PR2 

consents to an extension of the period of 

limitations on making adjustments under 

section 6235(b) and § 301.6235(d) for 

Partnership’s 2020 taxable year. On 

December 1, 2023, the IRS then withdraws 

the NAP. PR2 remains the partnership 

representative, and the consent to extend the 

period of limitations on making adjustments 

under section 6235(b) remains valid even 

after the NAP is withdrawn. 

(f) Applicability date—(1) In general. 

Except as provided in paragraph (f)(2) of 

this section, this section applies to 

partnership taxable years beginning 

after December 31, 2017. 

(2) Election under § 301.9100–22 in 

effect. This section applies to any 

partnership taxable years beginning 

after November 2, 2015 and before 

January 1, 2018 for which a valid 

election under § 301.9100–22 is in 

effect. 

■ Par. 4. Section 301.9100–22 is added 

to read as follows: 

§ 301.9100–22 Time, form, and manner of 

making the election under section 

1101(g)(4) of the Bipartisan Budget Act of 

2015 for returns filed for partnership taxable 

years beginning after November 2, 2015 and 

before January 1, 2018. 

(a) Election. Pursuant to section 

1101(g)(4) of the Bipartisan Budget Act 

of 2015, Public Law 114–74 (BBA), a 

partnership may elect at the time and in 

such form and manner as described in 

this section for amendments made by 

section 1101 of the BBA, except section 

6221(b) as added by the BBA, to apply 

to any return of the partnership filed for 

an eligible taxable year as defined in 

paragraph (d) of this section. An 

election is valid only if made in 

accordance with this section. Once 

made, an election may only be revoked 

with the consent of the Internal Revenue 

Service (IRS). An election is not valid if 

it frustrates the purposes of section 1101 

of the BBA. A partnership may not 

request an extension of time under 

§ 301.9100–3 for an election described 

in this section. 

(b) Election on notification by the 

IRS—(1) Time for making the election. 

Except as described in paragraph (c) of 

this section, an election under this 

section must be made within 30 days of 

the date of notification to a partnership, 

in writing, that a return of the 

partnership for an eligible taxable year 

has been selected for examination (a 

notice of selection for examination). 

(2) Form and manner of making the 

election—(i) In general. The partnership 

makes an election under this section by 

providing a written statement with the 

words ‘‘Election under Section 

1101(g)(4)’’ written at the top that 

satisfies the requirements of paragraph 

(b)(2) of this section to the individual 

identified in the notice of selection for 

examination as the IRS contact 

regarding the examination. 

(ii) Statement requirements. A 

statement making an election under this 

section must be in writing and be dated 

and signed by the tax matters partner, as 

defined under section 6231(a)(7) (prior 

to amendment by the BBA), and the 

applicable regulations, or an individual 

who has the authority to sign the 

partnership return for the taxable year 

under section 6063, the regulations 

thereunder, and applicable forms and 

instructions. The fact that an individual 

dates and signs the statement making 

the election described in this paragraph 

(b) shall be prima facie evidence that the 

individual is authorized to make the 

election on behalf of the partnership. A 

statement making an election must 

include— 

(A) The partnership’s name, taxpayer 

identification number, and the 

partnership taxable year for which the 

election described in this paragraph (b) 

is being made; 

(B) The name, taxpayer identification 

number, address, and daytime 

telephone number of the individual who 

signs the statement; 

(C) Language indicating that the 

partnership is electing application of 

section 1101(c) of the BBA for the 

partnership return for the eligible 

taxable year identified in the notice of 

selection for examination; 

(D) The information required to 

properly designate the partnership 

representative as defined by section 

6223 as amended by the BBA, which 

must include the name, taxpayer 

identification number, address, and 

daytime telephone number of the 

partnership representative and any 

additional information required by 

applicable regulations, forms and 

instructions, and other guidance issued 

by the IRS; 

(E) The following representations— 

(1) The partnership is not insolvent 

and does not reasonably anticipate 

becoming insolvent before resolution of 

any adjustment with respect to the 

partnership taxable year for which the 

election described in this paragraph (b) 

is being made; 

(2) The partnership has not filed, and 

does not reasonably anticipate filing, 

voluntarily a petition for relief under 

title 11 of the United States Code; 

(3) The partnership is not subject to, 

and does not reasonably anticipate 


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Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Rules and Regulations 39351 

becoming subject to, an involuntary 

petition for relief under title 11 of the 

United States Code; and 

(4) The partnership has sufficient 

assets, and reasonably anticipates 

having sufficient assets, to pay a 

potential imputed underpayment with 

respect to the partnership taxable year 

that may be determined under 

subchapter C of chapter 63 of the 

Internal Revenue Code as amended by 

the BBA; and 

(F) A representation, signed under 

penalties of perjury, that the individual 

signing the statement is duly authorized 

to make the election described in this 

paragraph (b) and that, to the best of the 

individual’s knowledge and belief, all of 

the information contained in the 

statement is true, correct, and complete. 

(iii) Notice of Administrative 

Proceeding. Upon receipt of the election 

described in this paragraph (b), the IRS 

will promptly mail a notice of 

administrative proceeding to the 

partnership and the partnership 

representative, as required under 

section 6231(a)(1) as amended by the 

BBA. Notwithstanding the preceding 

sentence, the IRS will not mail the 

notice of administrative proceeding 

before the date that is 30 days after 

receipt of the election described in 

paragraph (b) of this section. 

(c) Election for the purpose of filing 

an administrative adjustment request 

(AAR) under section 6227 as amended 

by the BBA—(1) In general. A 

partnership that has not been issued a 

notice of selection for examination as 

described in paragraph (b)(1) of this 

section may make an election with 

respect to a partnership return for an 

eligible taxable year for the purpose of 

filing an AAR under section 6227 as 

amended by the BBA. Once an election 

under this paragraph (c) is made, all of 

the amendments made by section 1101 

of the BBA, except section 6221(b) as 

added by the BBA, apply with respect 

to the partnership taxable year for 

which such election is made. 

(2) Time for making the election. No 

election under this paragraph (c) may be 

made before January 1, 2018. 

(3) Form and manner of making an 

election. An election under this 

paragraph (c) must be made in the 

manner prescribed by the IRS for that 

purpose in accordance with applicable 

regulations, forms and instructions, and 

other guidance issued by the IRS. 

(4) Effect of filing an AAR before 

January 1, 2018. Except in the case of 

an election made in accordance with 

paragraph (b) of this section, an AAR 

filed on behalf of a partnership before 

January 1, 2018, is deemed for purposes 

of paragraph (d)(2) of this section, to be 

an AAR filed under section 6227(c) 

(prior to amendment by the BBA) or an 

amended return of partnership income, 

as applicable. 

(d) Eligible taxable year—(1) In 

general. For purposes of this section, the 

term eligible taxable year means any 

partnership taxable year beginning after 

November 2, 2015 and before January 1, 

2018, except as provided in paragraph 

(d)(2) of this section. 

(2) Exception if AAR or amended 

return filed or deemed filed. 

Notwithstanding paragraph (d)(1) of this 

section, a partnership taxable year is not 

an eligible taxable year for purposes of 

this section if for the partnership taxable 

year— 

(i) The tax matters partner has filed an 

AAR under section 6227(c) (prior to 

amendment by the BBA), 

(ii) The partnership is deemed to have 

filed an AAR under section 6227(c) 

(prior to the amendment by the BBA) in 

accordance with paragraph (c)(4) of this 

section, or 

(iii) An amended return of 

partnership income has been filed or 

has been deemed to be filed under 

paragraph (c)(4) of this section. 

(e) Applicability date. These 

regulations are applicable to returns 

filed for partnership taxable years 

beginning after November 2, 2015 and 

before January 1, 2018. 

§ 301.9100–22T [Removed] 

■ Par. 5. Section 301.9100–22T is 

removed. 

Kirsten Wielobob, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: July 20, 2018. 

David J. Kautter, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2018–17002 Filed 8–6–18; 4:15 pm] 

BILLING CODE 4830–01–P 

DEPARTMENT OF LABOR 

Occupational Safety and Health 

Administration 

29 CFR Part 1910 

[Docket ID OSHA–H005C–2006–0870] 

RIN 1218–AD19 

Limited Extension of Select 

Compliance Dates for Occupational 

Exposure to Beryllium in General 

Industry 

AGENCY: Occupational Safety and Health 

Administration (OSHA), Labor. 

ACTION: Final rule. 

SUMMARY: With this final rule, OSHA is 

extending the compliance date for 

certain ancillary requirements of the 

general industry beryllium standard to 

December 12, 2018. This standard 

protects workers from the hazards of 

beryllium exposure. OSHA has 

determined that this final rule will 

maintain essential safety and health 

protections for workers while OSHA 

prepares a Notice of Proposed 

Rulemaking (NPRM) to clarify specific 

provisions of the beryllium standard in 

accordance with a settlement agreement 

entered into with stakeholders. The 

December 12, 2018, compliance date 

affects only certain ancillary provisions, 

i.e., methods of compliance, beryllium 

work areas, regulated areas, personal 

protective clothing and equipment, 

hygiene areas and practices, 

housekeeping, communication of 

hazards, and recordkeeping. 

DATES: This rule is effective August 9, 

2018. 

ADDRESSES: For purposes of 28 U.S.C. 

2112(a), OSHA designates Edmund 

Baird, Acting Associate Solicitor of 

Labor for Occupational Safety and 

Health, to receive petitions for review of 

the final rule. Contact the Acting 

Associate Solicitor at the Office of the 

Solicitor, Room S–4004, U.S. 

Department of Labor, 200 Constitution 

Avenue NW, Washington, DC 20210; 

telephone: (202) 693–5445. 

Citation Method 

In the docket for the beryllium 

rulemaking, found at http://

www.regulations.gov, every submission 

was assigned a document identification 

(ID) number that consists of the docket 

number (OSHA–H005C–2006–0870) 

followed by an additional four-digit 

number. For example, the document ID 

number for OSHA’s Preliminary 

Economic Analysis and Initial 

Regulatory Flexibility Analysis is 

OSHA–H005C–2006–0870–0426. Some 

document ID numbers include one or 

more attachments, such as the National 

Institute for Occupational Safety and 

Health (NIOSH) prehearing submission 

(see Document ID OSHA–H005C–2006– 

0870–1671). 

When citing exhibits in the docket, 

OSHA includes the term ‘‘Document 

ID’’ followed by the last four digits of 

the document ID number, the 

attachment number or other attachment 

identifier, if applicable, and page 

numbers (designated ‘‘p.’’ or ‘‘Tr.’’ for 

pages from a hearing transcript). In a 

citation that contains two or more 

document ID numbers, the document ID 

numbers are separated by semicolons. 

FOR FURTHER INFORMATION CONTACT: 


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