Theoretically, The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) is simple:
- The partnership is audited, and partnership items are subject to adjustment at the partnership level. I.R.C. § 6221.
- Assessments are made at the conclusion of the partnership proceeding. I.R.C. § 6225(a).
- Adjustment to partnership items are typically implemented at the partner level through “computational adjustments” that usually do not require a notice of deficiency. I.R.C. § 6230(a)(1).
Actually, however, TEFRA quickly becomes complicated when applied to a particular fact pattern.
On November 24, 2015, a case in the Court of Federal Claims demonstrated that the theoretically simple process of making “computational adjustments” is anything but simple.… Read More