PROCEDURALLY TAXING tax notes federal
by Jenni Black Jenni Black is a managing director in Citrin Cooperman’s national tax office and the practice leader of the tax procedure and controversy practice. Jenni is also a contributing author for Procedurally Taxing. In this post, Black examines the interaction between the alternative minimum tax and the additional reporting year tax when computing a partner’s total chapter 1 tax for the reporting year, in situations in which the partnership has made an election to push out the adjustments to its partners under the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015. This post reflects the author’s personal views and not necessarily those of Citrin Cooperman. Under the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015, any adjustments to partnership-related items must be determined, and any tax attributable to those adjustments must be assessed and collected, at the partnership level, unless BBA 1 provides for an exception. One of the exceptions to when the tax attributable to partnership adjustments must be assessed and collected at the partnership level is if the partnership makes an election under section 6226 (or section 6227(b)) to “push out” the adjustments to its partners from 2 the reviewed year. This article (published in two
parts) will examine exactly what the partner’s tax as a result of the pushed-out adjustments is, and how it fits in with a partner’s tax for the year. It’s easy as one, two, three. Under section 6226(b), if the partnership pushes out the adjustments, “each partner’s tax imposed by chapter 1 for the taxable year which includes the date the statement was furnished [by the partnership] shall be adjusted by” the sum of the “amount by which the tax imposed under chapter 1 would increase or decrease if the partner’s share of the adjustments . . . were taken into account” in the tax year to which the adjustments relate, and any year after that if the partner’s chapter 1 tax would have increased or decreased “by reason of the adjustment to tax attributes” “which would have been affected if the adjustments . . . were taken into account” in the year to which they relate. The reporting year is the tax year of the partner that includes the date the partnership furnishes the push out statements to its partners and is the tax year in which the partners must take into account the tax implications of the adjustments in the push out 3 statements. Let’s break it down. For starters, if the partnership pushes out the adjustments to its partners from the reviewed year, those partners’ chapter 1 tax for the reporting year is adjusted. Chapter 1 tax is adjusted. Which chapter 1 tax is adjusted? The partner’s chapter 1 tax for the reporting year (not the year to which the adjustments relate). By how much is the partner’s chapter 1 tax adjusted? By the “aggregate” (that is, sum) of two numbers —
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Section 6221(a).
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The reviewed year is the tax year to which the adjustment relates. Section 6225(d)(1); reg. section 301.6241-1(a)(8).
Reg. section 301.6226-3(a). For administrative adjustment requests, the reporting year and the adjustment year will be the same tax year. In the context of an exam, the adjustment year and the reporting year will be the same tax year unless the adjustments become finally determined toward the end of one tax year and the statements are not furnished until the next tax year.
TAX NOTES FEDERAL, VOLUME 190, FEBRUARY 2, 2026 For more Tax Notes® Federal content, please visit www.taxnotes.com.
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B-B-A, Easy as A-M-T