1. (a) In general If the partnership—

   1. (1) not later than 45 days after the date of the notice of final partnership adjustment, elects the application of this section with respect to an imputed underpayment, and
   2. (2) at such time and in such manner as the Secretary may provide, furnishes to each partner of the partnership for the reviewed year and to the Secretary a statement of the partner’s share of any adjustment to income, gain, loss, deduction, or credit (as determined in the notice of final partnership adjustment),

   section 6225 shall not apply with respect to such underpayment and each such partner shall take such adjustment into account as provided in subsection (b). The election under paragraph (1) shall be made in such manner as the Secretary may provide and, once made, shall be revocable only with the consent of the Secretary.

2. (b) Adjustments taken into account by partner

   1. (1) Tax imposed in year of statement Each partner’s tax imposed by chapter 1 for the taxable year which includes the date the statement was furnished under subsection (a) shall be increased by the aggregate of the adjustment amounts determined under paragraph (2) for the taxable years referred to therein.

   2. (2) Adjustment amounts The adjustment amounts determined under this paragraph are—

      1. (A) in the case of the taxable year of the partner which includes the end of the reviewed year, the amount by which the tax imposed under chapter 1 would increase if the partner’s share of the adjustments described in subsection (a) were taken into account for such taxable year, plus
      2. (B) in the case of any taxable year after the taxable year referred to in subparagraph (A) and before the taxable year referred to in paragraph (1), the amount by which the tax imposed under chapter 1 would increase by reason of the adjustment to tax attributes under paragraph (3).

   3. (3) Adjustment of tax attributes Any tax attribute which would have been affected if the adjustments described in subsection (a) were taken into account for the taxable year referred to in paragraph (2)(A) shall—

      1. (A) in the case of any taxable year referred to in paragraph (2)(B), be appropriately adjusted for purposes of applying such paragraph, and
      2. (B) in the case of any subsequent taxable year, be appropriately adjusted.

3. (c) Penalties and interest

   1. (1) Penalties Notwithstanding subsections (a) and (b), any penalties, additions to tax, or additional amount shall be determined as provided under section 6221 and the partners of the partnership for the reviewed year shall be liable for any such penalty, addition to tax, or additional amount.

   2. (2) Interest In the case of an imputed underpayment with respect to which the application of this section is elected, interest shall be determined—

      1. (A) at the partner level,
      2. (B) from the due date of the return for the taxable year to which the increase is attributable (determined by taking into account any increases attributable to a change in tax attributes for a taxable year under subsection (b)(2)), and
      3. (C) at the underpayment rate under section 6621(a)(2), determined by substituting “5 percentage points” for “3 percentage points” in subparagraph (B) thereof.
4. (d) Judicial review For the time period within which a partnership may file a petition for a readjustment, see section 6234(a).

(Added Pub. L. 114–74, title XI, § 1101(c)(1), Nov. 2, 2015, 129 Stat. 630; amended Pub. L. 114–113, div. Q, title IV, § 411(b)(1), Dec. 18, 2015, 129 Stat. 3122.)

Prior Provisions

A prior section 6226, added Pub. L. 97–248, title IV, § 402(a), Sept. 3, 1982, 96 Stat. 653; amended Pub. L. 97–448, title III, § 306(c)(1)(A), Jan. 12, 1983, 96 Stat. 2406; Pub. L. 102–572, title IX, § 902(b)(2), Oct. 29, 1992, 106 Stat. 4516; Pub. L. 105–34, title XII, §§ 1238(b)(1), 1239(b), 1240(a), Aug. 5, 1997, 111 Stat. 1026–1028, related to judicial review of final partnership administrative adjustments, prior to repeal by Pub. L. 114–74, title XI, § 1101(a), Nov. 2, 2015, 129 Stat. 625.

Amendments

2015—Subsec. (d). Pub. L. 114–113 added subsec. (d).

Effective Date of 2015 Amendment

Amendment by Pub. L. 114–113 effective as if included in section 1101 of Pub. L. 114–74, see section 411(e) of Pub. L. 114–113, set out as a note under section 6031 of this title.

Effective Date

Section applicable to returns filed for partnership taxable years beginning after Dec. 31, 2017, with certain exceptions, see section 1101(g) of Pub. L. 114–74, set out as a note under section 6221 of this title.