IRS Chief Counsel: Power of attorney for TEFRA-level proceedings

Power of attorney for TEFRA-level proceedings

The IRS today publicly released a legal advice memorandum* concerning when is a power of attorney (POA) sufficient in order for an IRS employee to solicit documents and discuss details of a partnership-level proceeding with the individual granted the power of attorney. AM2015-004 (release date April 3, 2015, and dated March 26, 2015)

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Read legal advice memo [PDF 74 KB].

*The memorandum is legal advice, signed by executives in the National Office of the Office of Chief Counsel and issued to IRS personnel who are national program executives and managers. The memo is issued to assist IRS personnel in administering their programs by providing authoritative legal opinions on certain matters, such as industry-wide issues. It is not to be used or cited as precedent.

Questions addressed

The IRS legal advice memo asks:

  • Who may sign a POA on behalf of a partnership or an LLC treated as a partnership for purposes of representing the partnership or LLC in discussions with IRS personnel?
  • From whom or with whom may the IRS solicit documents and discuss details pertaining to partnership-level issues?

A third question is also implied:

  • Who may authorize an extension of the period of limitations for all of the partnership’s partners (or LLC’s members for LLCs treated as a partnership)?


The legal advice memo concludes that:

  • Only a general partner, or managing member, authorized by state law (or foreign law in the case of a foreign entity) can execute a POA on behalf of, and that is binding upon, the partnership or LLC. A limited partner or member who is not a manager cannot act for the entity. Only someone duly authorized by state law (or foreign law in the case of a foreign entity) to act for and bind the entity can execute a POA in the name of the entity.
  • The IRS may solicit documents from and discuss details with: (1) a partner or member, or the person duly appointed by that partner or member pursuant to a POA signed by that partner or member, and the POA from the partner or member is to be executed in the partner or member’s individual capacity as a partner or member; or (2) an LLC manager who has no membership interest and a person duly appointed by the non-member manager, for purposes of establishing that it would be appropriate and helpful to secure partnership item information including securing documents and discussing the information with the designated person.
  • Only the tax matters partner (TMP), or someone other than the TMP authorized by the partnership pursuant to Reg. section 301.6229(b)-1, may extend the statute of limitations period for all of a partnership’s partners/members.

KPMG observation

The memo seeks to explain the parameters, or universe, of people with whom the IRS may make inquiries pertaining to and disclose details of a TEFRA partnership-level examination. It initially concludes that this universe includes direct and indirect partners of a partnership, or members of an LLC treated as a partnership. The memo then states that to the extent that these persons have inspection rights, such persons’ attorney in fact also have such rights.

Note that the Internal Revenue Manual (IRM) contains special provisions regarding POAs in the TEFRA context that are not included in the instructions to the Form 2848. For example, IRM (June 20, 2013) provides instructions that:

  • The Tax matters partner (TMP) is to execute the POA in his or her capacity as TMP
  • Under Line 3, Description of Matter, insert “TEFRA partnership proceedings”
  • Under “Federal Tax Form Number” enter “Form 1065”
  • Each tax period is to be reflected on the POA
  • If the POA is for more than one year, determine that TMP has remained the same
  • Upon death or termination of TMP, the POA becomes null and void, and a new TMP must be designated and a new POA executed

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