Selection: Letter 2205-D
“All initial taxpayer contacts must be made by mail.” The examiner sends Letter 2205-D to the partnership at its last known address for each year under exam, using paragraph 5 for BBA years and naming the PR (and DI) of record, or stating that IRS records do not reflect a PR (IRM 4.31.9.7.8). It does not need to go certified. The letter asks the partnership to call within 14 days to schedule an appointment.
The letter also opens a window of about 30 days, which the IRM says is not statutory and can be extended by the manager, to take actions that must come before the NAP:
- submit Form 8979 if there is no valid PR designation;
- file an administrative adjustment request (see AARs); or
- request revocation of an election out on Form 15288 (see electing out).
“Do not include or attach any Form 4564, Information Document Request (IDR) to Letter 2205-D.” The earliest IDRs come with the appointment confirmation letter, and records received are not reviewed until the NAPs go out. Before mailing, the examiner checks for subsequent filings (TC 976) and any prior-year IU or negative adjustments that should appear in the year under exam, and refers subsequent filings to a BBA point of contact (IRM 4.31.9.7.1).
The examiner also must not start an exam with less than 12 months left on the IRC 6235(a)(1) period without written managerial approval, and completes mandatory check sheets: Form 15260 (which regime applies), Form 15262 (BBA procedures), Form 15263 (relevant partners for chapter 2 and 2A), and Form 15416 for any Form 8979 (IRM 4.31.9.7.9).
The notice of administrative proceeding
IRC 6231(a)(1) requires the IRS to mail the partnership and the PR notice of any administrative proceeding. The IRM sets the window: “Issue the respective NAP letters no earlier than 30 days after the issuance of Letter 2205-D and no later than the earlier of the opening conference date or the date books and records are first inspected.” Letter 5893 goes to the partnership and Letter 5893-A to the PR, by certified mail in separate envelopes (registered mail for foreign addresses), dated the day they are mailed. If no PR designation is in effect, Letter 5893-A goes to “PARTNERSHIP REPRESENTATIVE” at the partnership's address. A separate set goes out for each year.
The NAP has consequences: the partnership can no longer file an AAR for that year, and partners can no longer amend their returns to report inconsistently with the partnership (IRM 4.31.9.8.1). The NAP date posts to the account as TC 971 AC 811, and an audit control number is generated that partners will see on later forms.
The IRS may withdraw the NAP within 60 days without the partnership's consent, for example if an AAR was filed before the NAP or the case is not worth examining. “Withdrawing the NAP letters is treated as if they had never been mailed.” The IRS issues Letters 6047 and 6047-A. A NAP cannot be withdrawn once books and records have been inspected (IRM 4.31.9.8.1.2).
During the exam
The examiner develops issues with the PR and records statute protection on Form 872-M when needed (see the BBA adjustment period). Mandatory BBA point of contact referrals cover chapter 2, 2A, 3 and 4 issues, IU computation questions, subsequent filings, special enforcement matters and invalid elections (IRM 4.31.9.7.2). Where chapter 2 or 2A tax is in play, the examiner links relevant partners so self-employment and net investment income tax can be assessed at the partner level after the BBA case (IRM 4.31.9.6.2 to 4.31.9.6.5).
Partners who report inconsistently with the partnership return without filing Form 8082 can be assessed as if for a math error, with no deficiency procedures and no IRC 6213(b)(2) abatement request (IRC 6222(b); IRM 4.31.9.8.2). The examiner uses Letter 6202 to notify the partner.
Alternative dispute resolution is available: Fast Track Settlement and early referral of developed issues to Appeals (IRM 4.31.9.9.5). See Fast Track Settlement. A binding agreement at the field level is possible only on Form 906: “An executed Form 906 agreement is the only way an examiner may secure a formal agreement at the field level.”
Summary report and 30-day letter
When issues are developed, a tax computation specialist prepares Form 14791 showing each adjustment, its grouping and treatment, the preliminary IU, penalties and estimated interest. The summary report package (Letter 5895, Form 14791, Forms 886-A) goes to the PR only. The IRM directs: “Issue the summary report package to the PR no later than 14 months prior to the IRC 6235(a)(1) date.” The PR may request a conference within two weeks. If the PR has made clear it wants Appeals, the examiner may skip straight to the 30-day letter.
To go to Appeals, at least 18 months must remain on the IRC 6235(a)(1) date when Technical Services receives the case, so the examiner issues the 30-day letter package (Letter 5891, Form 14791, Forms 886-A) only if at least 20 months remain, and otherwise asks for Form 872-M. The protest may cover any substantive issue, the IU amount and penalties, and must meet the requirements of Publication 5. An invalid protest is returned for perfection; if not perfected, the case closes without Appeals (IRM 4.31.9.10.2). The protest format is covered on formal protest letters.
No-change cases
If nothing changes, the examiner discusses the result with the PR and the partnership and PR receive Letters 6099 and 6099-A. A no-change with no adjustments and no chapter 2 or 2A linkage closes directly to Centralized Case Processing; one with partner-level adjustments or linkage goes through Technical Services (IRM 4.31.9.9.1 and 4.31.9.11.1 to 4.31.9.11.2). An LB&I case with a fully disallowed informal claim is not a no-change; the IRM has the examiner issue reports showing a $1 adjustment so the claim can be appealed.
The NOPPA
Appeals guidance stresses that the NOPPA is mandatory in every case with adjustments: “For both agreed and unagreed BBA partnership cases, the Service is required to issue the Notice of Proposed Partnership Adjustment (NOPPA) to the partnership and the Partnership Representative (PR) before the issuance of the Notice of Final Partnership Adjustment (FPA).” It must be mailed before the IRC 6235(a)(1) date (IRC 6231(b)(1)).
“The examiner does not issue the NOPPA package.” The examiner prepares it (Letters 5892 and 5892-A, Form 14792, Forms 886-A) with blank dates, and Technical Services mails it in cases not going to Appeals, or Appeals mails it after Appeals consideration. It goes by certified mail to the partnership and the PR, and its mailing starts the 270-day modification period (IRM 4.31.9.10.3; IRM 8.19.14.4.3). The partnership can pay the proposed IU before assessment using the EFTPS payment type Advance BBA Exam Imputed Underpayment (IRS audit page).
If the PR signs Form 14792, the IRS countersigns, the partnership waives the FPA, and the year the IRS countersigns becomes the adjustment year (IRM 4.31.9.9.2.10). Otherwise the case moves to BBA Operations to await modification or the FPA.
Modification and the FPA
During the 270 days the PR may request modification on Form 8980 (see modification requests), extend the period on Form 8984, or waive the rest of it on Form 8981. IRC 6231(b)(2)(A) bars an early FPA unless the partnership waives: per IRM 4.31.13.10, “The FPA may not be mailed earlier than 270 days after the date the NOPPA is mailed unless the partnership requests (by filing Form 8981) and the Internal Revenue Service (IRS) agrees to waive the 270-day period.”
The FPA package is Letter 5933 to the partnership, Letter 5933-A to the PR, Form 15027 showing the final IU with any approved modifications, penalties and interest, and Forms 886-A. Counsel approval is required before issuance, and BBA Operations generally mails it (Appeals mails FPAs in short-statute cases), by certified mail to the last known addresses of the partnership and PR, with the push-out and petition deadlines computed from the actual mailing date (IRM 4.31.13.10.2). An FPA mailed to the last known address is sufficient even if the partnership has terminated (IRC 6231(a)). An FPA returned unclaimed or refused is generally not considered undeliverable (IRM 4.31.13.13.3).
The IRS can rescind an FPA only with the partnership's consent (IRC 6231(d)), using Form 15057 and Letter 6247 (IRM 4.31.13.13.1). Once a petition is filed, the IRS cannot mail another FPA for that year absent fraud, malfeasance or misrepresentation of a material fact (IRC 6231(c)).
After the FPA
| Option | Deadline | Where covered |
|---|---|---|
| Agree by signing Form 15027 | Before default | This page |
| Elect push-out on Form 8988 | 45 days after the FPA | Push-out election |
| Petition Tax Court, district court or Court of Federal Claims | 90 days after the FPA | Appeals and Tax Court |
| Do nothing | Default after 90 days; assessment follows | Collection |
IRC 6232(b) bars assessment until the 90th day after the FPA, or until a court decision becomes final if a petition is filed, and IRC 6232(e) caps the liability at the FPA amount if no petition is filed. BBA Operations closes defaulted cases with disposal code 10 and agreed cases (including push-out) with code 09 (IRM 4.31.13.12.4).
Statute time the IRS needs at each handoff
IRM 4.31.9.11 requires a minimum time on the IRC 6235(a)(1) date when the case leaves the field, which drives when examiners ask for Form 872-M:
| Case type | Time remaining when received | Goes to |
|---|---|---|
| No-change, no adjustment, no linkage | 4 months | CCP |
| No-change with partner adjustments or linkage | 6 months | Technical Services |
| Adjustments, no Appeals | 12 months | Technical Services |
| Adjustments, to Appeals | 18 months | Technical Services |
With less time, imminent statute procedures apply and a case cannot go to Appeals unless Form 872-M is signed with at least 18 months remaining (IRM 4.31.9.11.6). Appeals itself requires at least 365 days on the statute for non-docketed BBA cases (IRM 8.19.14.2.3).
Questions practitioners ask
Is Letter 2205-D the start of the BBA proceeding?
No. Letter 2205-D is the notice of selection. The administrative proceeding formally begins with the NAP, Letters 5893 and 5893-A, which the IRM says goes out no earlier than 30 days after Letter 2205-D.
Can the partnership file an AAR after receiving Letter 2205-D?
Yes, until the NAP is mailed. The partnership generally has about 30 days after Letter 2205-D to file an AAR, designate a PR or seek revocation of an election out before the NAP letters are issued.
Who receives the summary report and 30-day letter?
Only the partnership representative. The NAP, NOPPA and FPA go to both the partnership and the PR.
How long after the NOPPA will the FPA come?
Not sooner than 270 days after the NOPPA unless the partnership waives on Form 8981. The FPA must be issued before the latest of the IRC 6235(a) dates, which include 270 days after a modification submission and 330 days after the NOPPA.
Can we agree with the adjustments and skip the FPA?
Yes. Signing Form 14792 after the NOPPA, or Forms 15027 and 14726 after a modification determination, waives the FPA. The year the IRS countersigns becomes the adjustment year.