Reg. § 301.6223(e)-2 Elections if Internal Revenue Service fails to provide timely notice.
(a) In general This section applies in any case in which the Internal Revenue Service fails to timely mail any notice described in section of the Internal Revenue Code to a partner entitled to such notice within the period specified in section . The failure to issue any notice within the period specified in section does not invalidate the notice of the beginning of an administrative proceeding or final partnership administrative adjustment (FPAA). An untimely FPAA enables the recipient of the untimely notice to make the elections described in , , and of this section. The period within which to make the elections described in , , and of this section commences with the mailing of an FPAA to the partner. In the absence of an election, and of this section provide for the treatment of a partner's partnership items.
(b) Proceeding finished If at the time the Internal Revenue Service mails the partner an FPAA—
(1) The period within which a petition for review of the FPAA under section may be filed has expired and no petition has been filed; or
(2) The decision of a court in an action begun by such a petition has become final, the partner may elect in accordance with of this section to have that adjustment, that decision, or a settlement agreement described in section 6224(c)(2) with respect to the partnership taxable year to which the adjustment relates apply to that partner. If the partner does not make an election in accordance with of this section, the partnership items of the partner for the partnership taxable year to which the proceeding relates shall be treated as having become nonpartnership items as of the day on which the Internal Revenue Service mails the partner the FPAA.
(c) Proceeding still going on If at the time the Internal Revenue Service mails the partner an FPAA, and of this section do not apply, the partner shall be a party to the proceeding unless the partner elects, in accordance with of this section, to have—
(1) A settlement agreement described in section 6224(c)(2) with respect to the partnership taxable year to which the proceeding relates apply to the partner; or
(2) The partnership items of the partner for the partnership taxable year to which the proceeding relates treated as having become nonpartnership items as of the day on which the Internal Revenue Service mails the partner the FPAA.
(d) Election
(1) In general The election described in or of this section shall be made in the manner prescribed in this . The election shall apply to all partnership items for the partnership taxable year to which the election relates.
(2) Time and manner of making election The election shall be made by filing a statement with the Internal Revenue Service office mailing the FPAA within 45 days after the date on which the FPAA was mailed to the partner making the election.
(3) Contents of statement The statement shall—
(i) Be clearly identified as an election under section or (3);
(ii) Specify the election being made (that is, application of final partnership administrative adjustment, court decision, consistent settlement agreement, or nonpartnership item treatment);
(iii) Identify the partner making the election and the partnership by name, address, and taxpayer identification number;
(iv) Specify the partnership taxable year to which the election relates; and
(v) Be signed by the partner making the election.
(e) Effective date This section is applicable to partnership taxable years beginning on or after October 4, 2001. For years beginning prior to October 4, 2001, see § contained in 26 CFR part 1, revised April 1, 2001.
[T.D. 8965, 66 FR 50550, Oct. 4, 2001]