Repeal and Reenactment of Section
Pub. L. 114–74, title XI, § 1101(a), (c)(1), (g), Nov. 2, 2015, 129 Stat. 625, 630, 638, provided that, applicable to returns filed for partnership taxable years beginning after Dec. 31, 2017, with certain exceptions, this section is repealed and a new section 6226 is enacted to read as follows:
§ 6226. Alternative to payment of imputed underpayment by partnership
(a) In general
If the partnership—
(1) not later than 45 days after the date of the notice of final partnership adjustment, elects the application of this section with respect to an imputed underpayment, and
(2) at such time and in such manner as the Secretary may provide, furnishes to each partner of the partnership for the reviewed year and to the Secretary a statement of the partner’s share of any adjustment to income, gain, loss, deduction, or credit (as determined in the notice of final partnership adjustment),
section 6225 shall not apply with respect to such underpayment and each such partner shall take such adjustment into account as provided in subsection (b). The election under paragraph (1) shall be made in such manner as the Secretary may provide and, once made, shall be revocable only with the consent of the Secretary.
(b) Adjustments taken into account by partner
(1) Tax imposed in year of statement
Each partner’s tax imposed by chapter 1 for the taxable year which includes the date the statement was furnished under subsection (a) shall be increased by the aggregate of the adjustment amounts determined under paragraph (2) for the taxable years referred to therein.
(2) Adjustment amounts
The adjustment amounts determined under this paragraph are—
(A) in the case of the taxable year of the partner which includes the end of the reviewed year, the amount by which the tax imposed under chapter 1 would increase if the partner’s share of the adjustments described in subsection (a) were taken into account for such taxable year, plus
(B) in the case of any taxable year after the taxable year referred to in subparagraph (A) and before the taxable year referred to in paragraph (1), the amount by which the tax imposed under chapter 1 would increase by reason of the adjustment to tax attributes under paragraph (3).
(3) Adjustment of tax attributes
Any tax attribute which would have been affected if the adjustments described in subsection (a) were taken into account for the taxable year referred to in paragraph (2)(A) shall—
(A) in the case of any taxable year referred to in paragraph (2)(B), be appropriately adjusted for purposes of applying such paragraph, and
(B) in the case of any subsequent taxable year, be appropriately adjusted.
(c) Penalties and interest
(1) Penalties
Notwithstanding subsections (a) and (b), any penalties, additions to tax, or additional amount shall be determined as provided under section 6221 and the partners of the partnership for the reviewed year shall be liable for any such penalty, addition to tax, or additional amount.
(2) Interest
In the case of an imputed underpayment with respect to which the application of this section is elected, interest shall be determined—
(A) at the partner level,
(B) from the due date of the return for the taxable year to which the increase is attributable (determined by taking into account any increases attributable to a change in tax attributes for a taxable year under subsection (b)(2)), and
(C) at the underpayment rate under section 6621(a)(2), determined by substituting “5 percentage points” for “3 percentage points” in subparagraph (B) thereof.
Pub. L. 114–113, div. Q, title IV, § 411(b)(1), (e), Dec. 18, 2015, 129 Stat. 3122, provided that, effective as if included in section 1101 of Pub. L. 114–74, this section (as added by Pub. L. 114–74, see note above) is amended by adding at the end the following new subsection:
(d) Judicial review
For the time period within which a partnership may file a petition for a readjustment, see section 6234(a).
Amendments
1997—Subsec. (b)(5), (6). Pub. L. 105–34, § 1240(a), added par. (5) and redesignated former par. (5) as (6).
Subsec. (d)(1). Pub. L. 105–34, § 1239(b), inserted concluding provisions.
Subsec. (f). Pub. L. 105–34, § 1238(b)(1), substituted “relates,” for “relates and” and inserted “, and the applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to a partnership item” before period at end.
1992—Subsecs. (a)(3), (e), (g). Pub. L. 102–572 substituted “Court of Federal Claims” for “Claims Court” wherever appearing.
1983—Subsec. (g). Pub. L. 97–448 substituted “With respect to the partnership, only the tax matters partner” for “Only the tax matters partner”.
Effective Date of 2015 Amendment
Amendment by Pub. L. 114–113 effective as if included in section 1101 of Pub. L. 114–74, see section 411(e) of Pub. L. 114–113, set out as a note under section 6031 of this title.
Effective Date of Repeal and Reenactment
Repeal and reenacted section applicable to returns filed for partnership taxable years beginning after Dec. 31, 2017, with certain exceptions, see section 1101(g) of Pub. L. 114–74, set out as an Effective Date of 2015 Amendment note under section 6221 of this title.
Effective Date of 1997 Amendment
Amendment by section 1238(b)(1) of Pub. L. 105–34 applicable to partnership taxable years ending after Aug. 5, 1997, see section 1238(c) of Pub. L. 105–34, set out as a note under section 6221 of this title.
Amendment by section 1239(b) of Pub. L. 105–34 applicable to partnership taxable years ending after Aug. 5, 1997, see section 1239(f) of Pub. L. 105–34, set out as a note under section 6225 of this title.
Pub. L. 105–34, title XII, § 1240(b), Aug. 5, 1997, 111 Stat. 1029, provided that:
“The amendment made by this section [amending this section] shall apply to petitions filed after the date of the enactment of this Act [Aug. 5, 1997].”
Effective Date of 1992 Amendment
Amendment by Pub. L. 102–572 effective Oct. 29, 1992, see section 911 of Pub. L. 102–572, set out as a note under section 171 of Title 28, Judiciary and Judicial Procedure.
Effective Date of 1983 Amendment
Amendment by Pub. L. 97–448 effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 311(d) of Pub. L. 97–448, set out as a note under section 31 of this title.