Partnerships, Interest, and Refund Claims: A Recipe for Misfortune, Part II

tax refund, general millsThis will continue coverage of the refund claim by General Mills that went awry. For a detailed review of the facts, look at my earlier post.

The case involved a series of overlapping audits of General Mills and an affiliated LLC, General Mills Cereals, LLC (the “Partnership”). To summarize, the situation was as follows:

  • As a C Corporation, General Mills was subject to what is known as LCU interest, a two percent increase in the underpayment rate that applies to underpayments by C Corporations that exceed $100,000. See I.R.C. § 6621(c).
  • There were gaps between the time when the IRS issued proposed deficiency notices in the corporate audits and the time when it outlined the impact on General Mills of the adjustments made in the audits of the Partnership.
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Partnerships, Interest, and Refund Claims: A Recipe for Misfortune

tax refund, general millsLast week, General Mills, Inc., the cereal maker, lost a significant refund case because its administrative claim was deemed untimely. General Mills, Inc. v. United States, No. 14-89T, 2015 U.S. Claims LEXIS 1311 (Fed. Cl. Oct. 14, 2015). The case involves the intersection of complex facts with confusing statutory provisions; not surprisingly, a partnership was involved.

General Mills is the parent of a number of subsidiary corporations, which were partners in General Mills Cereals, LLC (the “Partnership”), a limited liability company that was taxed as a partnership. General Mills, 2015 U.S. Claims LEXIS 1311 at *1. The refund claim related to interest accruals on tax items addressed in parallel audits of General Mills and the Partnership.… Read More