IRS Again Says that "Small Partnership" Exception Is For TEFRA Purposes Only.

The IRS Chief Counsel's Office has issued guidance to IRS agents to assist in determining whether the TEFRA audit procedures apply to a partnership.  The Chief Counsel's Office noted that the TEFRA/non-TEFRA determination is to be made at the beginning of the audit of the partnership.  The small partnership exception of I.R.C. Sec. 6231 is then determined to apply or not based on the partnership return.  As such, the small partnership exception is only for purposes of the partnership being exempt from the TEFRA audit procedures and does not mean that the entity is not a partnership for other purposes.  C.C.A. 201510046 (Jan. 23, 2015).