United States Tax Court
Rules
TITLE XXIV
PARTNERSHIP ACTIONS
Rule 240. General
(a) Applicability. The Rules of this Title XXIV set forth the
special provisions which apply to actions for readjustment of
partnership items under Code Section 6226 and actions for
adjustment of partnership items under Code Section 6228. Except
as otherwise provided in this Title, the other Rules of Practice
and Procedure of the Court, to the extent pertinent, are
applicable to such partnership actions.
(b) Definitions. As used in the Rules in this Title--
(1) The term "partnership" means a partnership as defined in
Code Section 6231(a)(1).
(2) A "partnership action" is either an "action for
readjustment of partnership items" under Code Section 6226 or an
"action for adjustment of partnership items" under Code Section
6228.
(3) The term "partnership item" means any item described in
Code Section 6231(a)(3).
(4) The term "tax matters partner" means the person who is the
tax matters partner under Code Section 6231(a)(7) and who under
these Rules is responsible for keeping each partner fully
informed of the partnership action. See Code Sections 6223(g)
and 6230(l).
(5) A "notice of final partnership administrative adjustment"
is the notice described in Code Section 6223(a)(2).
(6) The term "administrative adjustment request" means a
request for an administrative adjustment of partnership items
filed by the tax matters partner on behalf of the partnership
under Code Section 6227(b).
(7) The term "partner" means a person who was a partner as
defined in Code Section 6231(a)(2) at any time during any
partnership taxable year at issue in a partnership action.
(8) The term "notice partner" means a person who is a notice
partner under Code Section 6231(a)(8).
(9) The term "5-percent group" means a 5-percent group as
defined in Code Section 6231(a)(11).
(c) Jurisdictional requirements. The Court does not have
jurisdiction of a partnership action under this Title unless the
following conditions are satisfied:
(1) Actions for readjustment of partnership items.
(A) The Commissioner has issued a notice of final partnership
administrative adjustment. See Code Section 6226(a) and (b).
(B) A petition for readjustment of partnership items is filed
with the Court by the tax matters partner within the period
specified in Code Section 6226(a), or by a partner other than the
tax matters partner subject to the conditions and within the
period specified in Code Section 6226(b).
(2) Actions for adjustment of partnership items.
(A) The Commissioner has not allowed all or some of the
adjustments requested in an administrative adjustment request.
See Code Section 6228(a).
(B) A petition for adjustment of partnership items is filed
with the Court by the tax matters partner subject to the
conditions and within the period specified in Code Section
6228(a)(2) and (3).
(d) Form and style of papers. All papers filed in a
partnership action shall be prepared in the form and style set
forth in Rule 23, except that the caption shall state the name of
the partnership and the full name and surname of any partner
filing the petition and shall indicate whether such partner is
the tax matters partner, as for example, "ABC Partnership, Mary
Doe, Tax Matters Partner, Petitioner" or "ABC Partnership,
Richard Roe, A Partner Other Than the Tax Matters Partner,
Petitioner."
Rule 241. Commencement of Partnership Action
(a) Commencement of action. A partnership action shall be
commenced by filing a petition with the Court. See Rule 20,
relating to commencement of case; Rule 22, relating to the place
and manner of filing the petition; Rule 32, relating to form of
pleadings; and Rule 34(d), relating to number of copies to be
filed.
(b) Contents of petition. Each petition shall be entitled
either "Petition for Readjustment of Partnership Items under Code
Section 6226" or "Petition for Adjustment of Partnership Items
under Code Section 6228." Each such petition shall contain the
allegations described in paragraph (c) of this Rule, and the
allegations described in paragraph (d) or (e) of this Rule.
(c) All petitions. All petitions in partnership actions shall
contain the following:
(1) The name and address of the petitioner.
(2) The name, employer identification number, and principal
place of business of the partnership at the time the petition is
filed.
(3) The City and State of the office of the Internal Revenue
Service with which the partnership's return for the period in
controversy was filed.
A claim for reasonable litigation or administrative costs
shall not be included in the petition in a partnership action.
For the requirements as to claims for reasonable litigation or
administrative costs, see Rule 231.
(d) Petition for readjustment of partnership items. In
addition to including the information specified in paragraph (c)
of this Rule, a petition for readjustment of partnership items
shall also contain:
(1) All petitions. All petitions for readjustment of
partnership items shall contain:
(A) The date of the notice of final partnership administrative
adjustment and the City and State of the office of the Internal
Revenue Service which issued the notice.
(B) The year or years or other periods for which the notice of
final partnership administrative adjustment was issued.
(C) Clear and concise statements of each and every error which
the petitioner alleges to have been committed by the Commissioner
in the notice of final partnership administrative adjustment. The
assignments of error shall include issues in respect of which the
burden of proof is on the Commissioner. Any issues not raised in
the assignments of error, or in the assignments of error in any
amendment to the petition, shall be deemed to be conceded. Each
assignment of error shall be set forth in a separately lettered
subparagraph.
(D) Clear and concise lettered statements of the facts on
which the petitioner bases the assignments of error, except with
respect to those assignments of error as to which the burden of
proof is on the Commissioner.
(E) A prayer setting forth relief sought by the petitioner.
(F) The signature, mailing address, and telephone number of
each petitioner or each petitioner's counsel, as well as
counsel's Tax Court bar number.
(G) A copy of the notice of final partnership administrative
adjustment, which shall be appended to the petition, and with
which there shall be included so much of any statement
accompanying the notice as is material to the issues raised by
the assignments of error. If the notice of final partnership
administrative adjustment or any accompanying statement
incorporates by reference any prior notices, or other material
furnished by the Internal Revenue Service, such parts thereof as
are material to the assignments of error likewise shall be
appended to the petition.
(2) Petitions by tax matters partners. In addition to
including the information specified in paragraph (d)(1) of this
Rule, a petition filed by a tax matters partner shall also
contain a separate numbered paragraph stating that the pleader is
the tax matters partner.
(3) Petitions by other partners. In addition to including the
information specified in paragraph (d)(1) of this Rule, a
petition filed by a partner other than the tax matters partner
shall also contain:
(A) A separate numbered paragraph stating that the pleader is
a notice partner or a representative of a 5-percent group (see
Code Section 6226(b)(1)).
(B) A separate numbered paragraph setting forth facts
establishing that the pleader satisfies the requirements of Code
Section 6226(d).
(C) A separate numbered paragraph stating the name and current
address of the tax matters partner.
(D) A separate numbered paragraph stating that the tax matters
partner has not filed a petition for readjustment of partnership
items within the period specified in Code Section 6226(a).
(e) Petition for adjustment of partnership items. In addition
to including the information specified in paragraph (c) of this
Rule, a petition for adjustment of partnership items shall also
contain:
(1) A statement that the petitioner is the tax matters
partner.
(2) The date that the administrative adjustment request was
filed and other proper allegations showing jurisdiction in the
Court in accordance with the requirements of Code Section
6228(a)(1) and (2).
(3) The year or years or other periods to which the
administrative adjustment request relates.
(4) The City and State of the office of the Internal Revenue
Service with which the administrative adjustment request was
filed.
(5) A clear and concise statement describing each partnership
item on the partnership return that is sought to be changed, and
the basis for each such requested change. Each such statement
shall be set forth in a separately lettered subparagraph.
(6) Clear and concise lettered statements of the facts on
which the petitioner relies in support of such requested changes
in treatment of partnership items.
(7) A prayer setting forth relief sought by the petitioner.
(8) The signature, mailing address, and telephone number of
the petitioner or the petitioner's counsel, as well as counsel's
Tax Court bar number.
(9) A copy of the administrative adjustment request shall be
appended to the petition.
(f) Notice of filing.
(1) Petitions by tax matters partner. Within 5 days after
receiving the Notification of Receipt of Petition from the Court,
the tax matters partner shall serve notice of the filing of the
petition on each partner in the partnership as required by Code
Section 6223(g). Said notice shall include the docket number
assigned to the case by the Court (see Rule 35) and the date the
petition was served by the Clerk on the Commissioner.
(2) Petitions by other partners. Within 5 days after receiving
the Notification of Receipt of Petition from the Court, the
petitioner shall serve a copy of the petition on the tax matters
partner, and at the same time notify the tax matters partner of
the docket number assigned to the case by the Court (see Rule 35)
and the date the petition was served by the Clerk on the
Commissioner. Within 5 days after receiving a copy of the
petition and the aforementioned notification from the petitioner,
the tax matters partner shall serve notice of the filing of the
petition on each partner in the partnership as required by Code
Section 6223(g). Said notice shall include the docket number
assigned to the case by the Court and the date the petition was
served by the Clerk on the Commissioner.
(g) Copy of petition to be provided all partners. Upon request
by any partner in the partnership as referred to in Code Section
6231(a)(2)(A), the tax matters partner shall, within 10 days of
receipt of such request, make available to such partner a copy of
any petition filed by the tax matters partner or by any other
partner.
Rule 242. Designation of Place of Trial
At the time of filing a petition in a partnership action, a
designation of place of trial shall be filed in accordance with
Rule 140.
Rule 243. Other Pleadings
(a) Answer. The Commissioner shall file an answer or shall
move with respect to the petition within the periods specified in
and in accordance with the provisions of Rule 36.
(b) Reply. For provisions relating to the filing of a reply,
see Rule 37.
Rule 244. Joinder of Issue in Partnership Action
A partnership action shall be deemed at issue upon the later
of:
(1) the time provided by Rule 38, or
(2) the expiration of the period within which a notice of
election to intervene or to participate may be filed under Rule
245(a) or (b).
Rule 245. Intervention and Participation
(a) Tax matters partner. The tax matters partner may
intervene in an action for readjustment of partnership items
brought by another partner or partners by filing a notice of
election to intervene with the Court. Such notice shall state
that the intervenor is the tax matters partner and shall be filed
within 90 days from the date of service of the petition by the
Clerk on the Commissioner. See Code Section 6226(b)(2) and Rule
241(d)(3).
(b) Other partners. Any other partner who satisfies the
requirements of Code Section 6226(d) or 6228(a)(4)(B) may
participate in the action by filing a notice of election to
participate with the Court. Such notice shall set forth facts
establishing that such partner satisfies the requirements of Code
Section 6226(d) in the case of an action for readjustment of
partnership items or Code Section 6228(a)(4)(B) in the case of an
action for adjustment of partnership items and shall be filed
within 90 days from the date of service of the petition by the
Clerk on the Commissioner. A single notice may be filed by two or
more partners; however, each such partner must satisfy all
requirements of this paragraph in order for the notice to be
treated as filed by or for that partner.
(c) Enlargement of time. The Court may grant leave to file a
notice of election to intervene or a notice of election to
participate out of time upon a showing of sufficient cause.
(d) Pleading. No assignment of error, allegation of fact, or
other statement in the nature of a pleading shall be included in
a notice of election to intervene or notice of election to
participate. As to the form and content of a notice of election
to intervene and a notice of election to participate, see
Appendix I, Forms 14 and 15, respectively.
(e) Amendments to the petition. A party other than the
petitioner who is authorized to raise issues not raised in the
petition may do so by filing an amendment to the petition. Such
an amendment may be filed, without leave of Court, at any time
within the period specified in Rule 245(b). Otherwise, such an
amendment may be filed only by leave of Court. See Rule 36(a) for
time for responding to amendments to the petition.
Rule 246. Service of Papers
(a) Petitions. All petitions shall be served by the Clerk on
the Commissioner.
(b) Papers issued by the Court. All papers issued by the Court
shall be served by the Clerk on the Commissioner, the tax matters
partner (whether or not the tax matters partner is a
participating partner), and all other participating partners.
(c) All other papers. All other papers required to be served
(see Rule 21(a)) shall be served by the parties filing such
papers. Whenever a paper (other than a petition) is required by
these Rules to be filed with the Court, the original paper shall
be filed with the Court with certificates by the filing party or
the filing party's counsel that service of the paper has been
made on each of the other parties set forth in paragraph (b) of
this Rule or on such other parties' counsel.
Rule 247. Parties
(a) In general. For purposes of this title of these Rules,
the Commissioner, the partner who filed the petition, the tax
matters partner, and each person who satisfies the requirements
of Code Section 6226(c) and (d) or 6228(a)(4) shall be treated as
parties to the action.
(b) Participating partners. Participating partners are the
partner who filed the petition and such other partners who have
filed either a notice of election to intervene or a notice of
election to participate in accordance with the provisions of Rule
245. See Code Sections 6226(c) and 6228(a)(4)(A).
Rule 248. Settlement Agreements
(a) Consent by the tax matters partner to entry of decision.
A stipulation consenting to entry of decision executed by the tax
matters partner and filed with the Court shall bind all parties.
The signature of the tax matters partner constitutes a
certificate by the tax matters partner that no party objects to
entry of decision. See Rule 251.
(b) Settlement or consistent agreements entered into by all
participating partners or no objection by participating partners.
(1) After the expiration of the time within which to file a
notice of election to intervene or to participate under Rule
245(a) or (b), the Commissioner shall move for entry of decision,
and shall submit a proposed form of decision with such motion, if-
-
(A) all of the participating partners have entered into a
settlement agreement or consistent agreement with the
Commissioner, or all of such partners do not object to the
granting of the Commissioner's motion for entry of decision, and
(B) the tax matters partner (if a participating partner)
agrees to the proposed decision in the case but does not certify
that no party objects to the granting of the Commissioner's
motion for entry of decision.
(2) Within 3 days from the date on which the Commissioner's
motion for entry of decision is filed with the Court, the
Commissioner shall serve on the tax matters partner a certificate
showing the date on which the Commissioner's motion was filed
with the Court.
(3) Within 3 days after receiving the Commissioner's
certificate, the tax matters partner shall serve on all other
parties to the action other than the participating partners, a
copy of the Commissioner's motion for entry of decision, a copy
of the proposed decision, a copy of the Commissioner's
certificate showing the date on which the Commissioner's motion
was filed with the Court, and a copy of this Rule.
(4) If any party objects to the granting of the Commissioner's
motion for entry of decision, then that party shall, within 60
days from the date on which the Commissioner's motion was filed
with the Court, file a motion for leave to file a notice of
election to intervene or to participate, accompanied by a
separate notice of election to intervene or a separate notice of
election to participate, as the case may be. If no such motion is
filed with the Court within such period, or if the Court should
deny such motion, then the Court may enter the proposed decision
as its decision in the partnership action. See Code Sections
6226(f) and 6228(a)(5). See also Rule 245, relating to
intervention and participation, and Rule 251, relating to
decisions.
(c) Other settlement and consistent agreements. If a
settlement agreement or consistent agreement is not within the
scope of paragraph (b) of this Rule, then--
(1) in the case of a participating partner, the Commissioner
shall promptly file with the Court a notice of settlement
agreement or notice of consistent agreement, whichever may be
appropriate, that identifies the participating partner or
partners who have entered into the settlement agreement or
consistent agreement; and
(2) in the case of any partner who enters into a settlement
agreement, the Commissioner shall, within 7 days after the
settlement agreement is executed by both the partner and the
Commissioner, serve on the tax matters partner a statement which
sets forth--
(A) the identity of the party or parties to the settlement
agreement and the date of the agreement;
(B) the year or years to which the settlement agreement
relates; and
(C) the terms of settlement as to each partnership item and
the allocation of such items among the partners. Within 7 days
after receiving the statement required by this subparagraph, the
tax matters partner shall serve a copy of the statement on all
parties to the action.
Rule 249. Action for Adjustment of Partnership Items
Treated as Action for Readjustment of Partnership Items
(a) Amendment to petition. If, after the filing of a petition
for adjustment of partnership items (see Code Section 6228(a) and
Rule 241(a)) but before the hearing of such petition, the
Commissioner mails to the tax matters partner a notice of final
partnership administrative adjustment for the partnership taxable
year to which the petition relates, then such petition shall be
treated as a petition in an action for readjustment of the
partnership items to which such notice relates. The petitioner,
within 90 days after the date on which the notice of final
partnership administrative adjustment is mailed to the tax
matters partner, shall file an amendment to the petition, setting
forth every error which the petitioner alleges to have been
committed by the Commissioner in the notice of final partnership
administrative adjustment, and the facts on which the petitioner
bases the assignments of error. A copy of the notice of final
partnership administrative adjustment shall be appended to the
amendment to the petition. On or before the day the amendment to
petition is delivered to the Court, or, if the amendment to
petition is mailed to the Court, on or before the day of mailing,
the tax matters partner shall serve notice of the filing of the
amendment to petition on each partner in the partnership as
required by Code Section 6223(g).
(b) Participation. Any partner who has filed a timely notice
of election to participate in the action for adjustment of
partnership items shall be deemed to have elected to participate
in the action for readjustment of partnership items and need not
file another notice of election to do so. Any other partner may
participate in the action by filing a notice of election to
participate within 90 days from the date of filing of the
amendment to petition. See Rule 245.
Rule 250. Appointment and Removal of the Tax Matters
Partner
(a) Appointment of tax matters partner. If, at the time of
commencement of a partnership action by a partner other than the
tax matters partner, the tax matters partner is not identified in
the petition, then the Court will take such action as may be
necessary to establish the identity of the tax matters partner or
to effect the appointment of a tax matters partner.
(b) Removal of tax matters partner. After notice and
opportunity to be heard, (1) the Court may for cause remove a
partner as the tax matters partner and (2) if the tax matters
partner is removed by the Court, or if a partner's status as the
tax matters partner is terminated for reason other than removal
by the Court, then the Court may appoint another partner as the
tax matters partner if the partnership fails to designate a
successor tax matters partner within such period as the Court may
direct.
Rule 251. Decisions
A decision entered by the Court in a partnership action shall
be binding on all parties. For the definition of parties, see
Rule 247(a).
