[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: 26CFR301.6231(f)-1]

[Page 199-200]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Assessment
 
Sec. 301.6231(f)-1  Disallowance of losses and credits in certain cases.

    (a) Application of section. This section applies if--
    (1) A partnership, whether domestic or foreign, that is required to 
file a return under section 6031 for a taxable year fails to file the 
return within the time prescribed; and
    (2) At any time after the close of that taxable year, either--
    (i) The tax matters partner of that partnership resides outside the 
United States; or
    (ii) The books and records of that partnership are maintained 
outside the United States.
    (b) Computational adjustment permitted if return is not filed after 
mailing of notice. Except as otherwise provided in paragraph (c) of this 
section, if--
    (1) This section applies with respect to a partnership for a 
partnership taxable year;
    (2) The Internal Revenue Service mails notice to a partner that the 
losses and credits arising from that partnership for that year will be 
disallowed to that partner unless the partnership files a return for 
that year within 60 days after the date on which the notice is mailed; 
and
    (3) The partnership fails to file a return for that year within that 
60-day period, the Internal Revenue Service may, without conducting a 
partnership-level proceeding, mail a notice of computational adjustment 
to that partner to reflect the disallowance of any loss (including a 
capital loss) or credit arising from that partnership for that year.
    (c) Restriction on notices under paragraph (b) of this section. 
Neither the notice referred to in paragraph (b)(2) of this section nor 
the notice of computational adjustment referred to in paragraph (b) of 
this section may be mailed on a day on which--
    (1) The tax matters partner of the partnership resides within the 
United States; and
    (2) The books and records of the partnership are maintained within 
the

[[Page 200]]

United States. Thus, if this section applies with respect to a 
partnership for a taxable year solely because the tax matters partner of 
that partnership resided outside the United States for a period after 
the close of that taxable year and the tax matters partner later takes 
up residence within the United States, no notice may be mailed under 
paragraph (b) of this section while the tax matters partner resides 
within the United States.
    (d) No disallowance in certain circumstances. If the person to whom 
the notice referred to in paragraph (b)(2) of this section is mailed 
establishes to the satisfaction of the Internal Revenue Service--
    (1) That the losses and credits arising from the partnership for the 
year are proper; and
    (2) That the partner has made a good faith effort to have the 
partnership file the required return; the Internal Revenue Service may 
allow the losses and credits in whole or in part.
    (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. 301.6231(f)-1T contained in 26 CFR 
part 1, revised April 1, 2001.

[T.D. 8965, 66 FR 50563, Oct. 4, 2001]