[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: 26CFR301.6224(c)-2]

[Page 175]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Assessment
 
Sec. 301.6224(c)-2  Pass-thru partner binds indirect partners.

    (a) Pass-thru partner binds unidentified indirect partners--(1) In 
general. If a pass-thru partner enters into a settlement agreement with 
the Internal Revenue Service with respect to partnership items, that 
agreement binds all indirect partners holding an interest in that 
partnership through the pass-thru partner except those indirect partners 
who have been identified as provided in section 6223(c)(3) and Sec. 
301.6223(c)-1 at least 30 days before the date on which the agreement is 
entered into. A settlement with respect to partnership items includes 
partnership-level determinations relating to any penalty, addition to 
tax, and additional amounts that relate to adjustments to partnership 
items. However, if, in addition to the interest in the partnership held 
through the pass-thru partner entering into a settlement agreement, an 
indirect partner holds a separate interest in that partnership, either 
directly or indirectly through a different pass-thru partner, then the 
indirect partner shall not be bound by that settlement agreement with 
respect to the interests held directly or indirectly through a pass-thru 
partner other than the pass-thru partner entering into the settlement 
agreement.
    (2) Example. The provisions of paragraph (a)(1) of this section may 
be illustrated by the following example:

    Example. Partnership J is a partner in partnership P. C is a partner 
in J but has not been identified as provided in section 6223(c)(3) and 
Sec. 301.6223(c)-1. The only interest that C holds in P is through J. 
The tax matters partner of J enters into a settlement agreement with the 
Internal Revenue Service with respect to partnership items arising from 
P. C is bound by the settlement agreement entered into by the tax 
matters partner of J.

    (b) Person in pass-thru partner authorized to enter into settlement 
agreement that binds indirect partners. In the case of a pass-thru 
partner that is--
    (1) A partnership within the meaning of section 6231(a)(1), the tax 
matters partner of that partnership;
    (2) A partnership other than a partnership described in paragraph 
(b)(1) of this section, any general partner of that partnership;
    (3) An S corporation, any officer of that S corporation; or
    (4) A trust, estate, or nominee, any person authorized in writing to 
act on behalf of that trust, estate, or nominee, may enter into a 
settlement agreement with the Internal Revenue Service on behalf of its 
respective entity that would bind the unidentified indirect partners 
that hold a partnership interest through the pass-thru partner.
    (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. 301.6224(c)-2T contained in 26 CFR 
part 1, revised April 1, 2001.

[T.D. 8965, 66 FR 50552, Oct. 4, 2001]