Firm Seeks Partnership Filing Relief

March 26, 2020

The Honorable David J. Kautter
Assistant Secretary for Tax Policy
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220

The Honorable Charles P. Rettig
Commissioner
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224

The Honorable Michael J Desmond
Chief Counsel
Internal Revenue Service
1111 Constitution Avenue, NW

Ms. Holly Porter
Associate Chief Counsel
Passthrough & Special Industries
Internal Revenue Service
1111 Constitution Ave, NW
Washington, D.C. 20224

Dear Messrs Kautter, Desmond, Rettig and Porter:

Last night, the Senate passed legislation providing economic relief for millions of Americans affected by the Covid-19 global pandemic. One of the centerpieces of this legislation is an attempt to provide an economic stimulus by putting money into taxpayers' pockets. Several of the provisions are described as business tax provisions, which include changes to the treatment of net operating losses, excess loss limitations, business interest expense limitations and rules relating to the immediate expensing of qualified improvement property. In many instances, the ability of taxpayers to 'monetize' the associated tax benefits will require the filing of amended tax returns. In some instances, such tax benefits stem from activity reported in a prior year on a partnership tax return for a partnership that is subject to either the TEFRA consolidated audit procedure or the Bipartisan Budget Reconciliation Act of 2015 (BBA) partnership audit procedures. Under section 6031(b), BBA partnerships generally are not permitted to file amended tax returns. Instead, those partnerships generally are required to file Form 8082, Administrative Adjustment Request, in order to process changes to the amount of partnership items reported on timely filed prior year partnership tax returns.

Importantly, however, 6031(b)(4) allows for the Secretary to provide for situations in which the filing of amended partnership returns by TEFRA or BBA partnerships would be permitted. We urge you to provide guidance, as quickly as possible, allowing such partnerships to file amended tax returns in situations in which prior year returns reflect, or would have reflected, partnership items, the amount of which may be affected by provisions contained in the CARES Act. By so doing, you will enable partners to monetize the tax benefits associated with the CARES Act as quickly as possible.

In making this recommendation, we are mindful of the government's concern that the filing of an amended partnership tax return generally does not restart or otherwise extend the statute of limitations applicable to such tax returns. As a result, we suggest that you consider treating the filing of an amended partnership return as an automatic consent by the partnership to extend the relevant statute

of limitations for a prescribed period of time. Under this approach, a partnership affected by the CARES Act would have a choice to either file a Form 8082, which will delay the opportunity for its partners to monetize the tax benefits associated with the CARES Act, or file an amended partnership return and consent to the associated extension of the governing statute of limitations for the prescribed period.

Sincerely,

Glenn E. Dance, Partner
Holthouse Carlin & Van Trigt LLP
Irvine, CA

CC:
Clifford Warren, IRS
Jennifer Black, IRS
Meghan Howard, IRS
Robert J, Crnkovich, IRS
Roger F. Pillow, IRS
Holly Paz, IRS
Elizabeth Wagner, IRS
Drita Tonuzi, IRS