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. She is also a contributing author for Procedurally Taxing. In this post, Black examines whether, in a case challenging a notice of final partnership adjustment under the Bipartisan Budget Act of 2015, the court loses its ability to make an adjustment if the section 6235 limitations period expires while the court case is ongoing. This post reflects the author’s personal views and not necessarily those of Citrin Cooperman. The centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015 is 1 unique in a lot of ways. One unique feature of BBA is that it has a period of limitations on making
adjustments, not a period of limitations on 2 assessments. Under section 6235, “no adjustment under [BBA] for any partnership taxable year may be made” after the period in section 6235 expires. The section 6235 period of limitations on making adjustments expires the later of (1) three years from when the partnership return (or administrative adjustment request (AAR)) is filed; (2) if modification is requested, the date which is 270 days after the date everything required to be submitted for modification is submitted; or (3) the date which is 330 days after the date of the notice of proposed partnership adjustment. All of these dates can be extended and there are special rules that extend the period of limitations for situations like fraud, nonfilers, substantial omissions, etc., just like under section 6501. Under section 6234, if the IRS makes adjustments in a notice of final partnership adjustment (FPA), the partnership may file a petition in the Tax Court, district court, or Court of Federal Claims to challenge those adjustments. However, unlike the period of limitations on 3 making assessments, the period of limitations on making adjustments under section 6235 is not suspended during the period in which the case is pending in court. So what happens if the section 6235 period expires while the court case is ongoing? Does the court lose its ability to make adjustments?
2
1
I call it unique but technically the electing large partnership (ELP) regime under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) also had a period of limitations on making adjustments. See section 6248 (prior to repeal by the BBA). However, as the ELP regime was never really used, BBA is really the first time a period of limitations on making adjustments is operative.
That’s not to say that the period of limitations on assessing tax under section 6501 doesn’t apply to BBA; it absolutely does. The imputed underpayment and any partner tax (for example, as a result of push out) must be assessed within the applicable period of limitations on making assessments. But, if adjustments are made under BBA, any tax impact of those adjustments occurs in a “current” year which has a brand new period of limitations on making assessments. As such, the ability to make adjustments will always be shorter than the period of limitations to assess any tax attributable to those adjustments. 3
Section 6503.
TAX NOTES FEDERAL, VOLUME 190, FEBRUARY 23, 2026 For more Tax Notes® Federal content, please visit www.taxnotes.com.
1311
© 2026 Tax Analysts. All rights reserved. Tax Analysts does not claim copyright in any public domain or third party content.
Isn’t It Ironic?: A Court’s Ability to Make Adjustments Under BBA