[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6223(e)-1]

[Page 170]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Assessment
 
Sec. 301.6223(e)-1  Effect of Internal Revenue Service's failure to 
provide notice.

    (a) Notice group. Section 6223(e)(1)(B)(ii) applies with respect to 
a notice group only if the request for notice described in Sec. 
301.6223(b)-1 is received by the Internal Revenue Service at least 30 
days before the notice is mailed to the tax matters partner.
    (b) Indirect partners--(1) In general. For purposes of section 
6223(e), the Internal Revenue Service's failure to provide notice to a 
pass-thru partner entitled to notice under section 6223(b) is deemed a 
failure to provide notice to indirect partners holding an interest in 
the partnership through the pass-thru partner. However, this rule does 
not apply if the indirect partner--
    (i) Receives notice from the Internal Revenue Service;
    (ii) Is identified as provided in section 6223(c)(3) and Sec. 
301.6223(c)-1 at least 30 days before the notice is mailed to the tax 
matters partner; or
    (iii) Is a member of a notice group entitled to notice under 
paragraph (a) of this section.
    (2) Examples. The provisions of paragraph (b)(1) of this section may 
be illustrated by the following examples:

    Example 1. Partnership ABC has as one of its partners, A, a 
partnership with three partners, X, Y, and Z. ABC does not have more 
than 100 partners, and partnership A is entitled to notice under section 
6223(a). In addition, Z was identified as provided in section 6223(c)(3) 
and Sec. 301.6223(c)-1 on May 1, 2002. The Internal Revenue Service 
mailed a notice to the tax matters partner of ABC on July 1, 2002, but 
failed to provide notice to partnership A. Notwithstanding the Internal 
Revenue Service's notice to the tax matters partner, the Internal 
Revenue Service is deemed to have failed to provide notice to X and Y. 
The Internal Revenue Service's failure to provide notice to A, however, 
has no effect on Z; whether notice was provided to Z is determined 
independently.
    Example 2. Assume the same facts as in Example 1, except that the 
Internal Revenue Service provided notice to partnership A but did not 
provide separate notice to Z. Notwithstanding the Internal Revenue 
Service's notice to partnership A, the Internal Revenue Service is 
deemed to have failed to provide notice to Z.
    Example 3. Assume the same facts as in Example 1, except that 
partnership ABC has more than 100 partners and partnership A is entitled 
to notice under section 6223(b) because it had at least a 1 percent 
profits interest in partnership ABC. In addition, X became a member of a 
notice group on June 1, 2002, and the Internal Revenue Service mailed a 
notice to the designated member of that notice group. The Internal 
Revenue Service also mailed a separate notice to Z. The Internal Revenue 
Service's failure to provide notice to partnership A only affects Y, who 
is deemed not to have been provided notice by the Internal Revenue 
Service.

    (c) 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 Sec. 301.6223(e)-1T contained in 26 CFR 
part 1, revised April 1, 2001.

[T.D. 8965, 66 FR 50549, Oct. 4, 2001]