[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)-2]

[Page 170-171]
 
                       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)-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 6223(a) of the Internal Revenue Code to a partner entitled to 
such notice within the period specified in section 6223(d). The failure 
to

[[Page 171]]

issue any notice within the period specified in section 6223(d) 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 paragraphs (b), (c), and (d) of this section. The period 
within which to make the elections described in paragraphs (b), (c), and 
(d) of this section commences with the mailing of an FPAA to the 
partner. In the absence of an election, paragraphs (b) and (c) 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 6226 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 paragraph (d) 
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 
paragraph (d) 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, paragraphs (b)(1) and (2) of this 
section do not apply, the partner shall be a party to the proceeding 
unless the partner elects, in accordance with paragraph (d) 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 paragraph 
(b) or (c) of this section shall be made in the manner prescribed in 
this paragraph (d). 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 6223(e)(2) 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 Sec. 301.6223(e)-2T contained in 26 CFR 
part 1, revised April 1, 2001.

[T.D. 8965, 66 FR 50550, Oct. 4, 2001]