(a) Applicability. This Appendix sets forth the special provisions that apply to actions for readjustment of partnership items under Section 6226 of the Internal Revenue Code (Code) and actions for adjustment of partnership items under Code Section 6228. Except as otherwise provided in this Appendix, the RCFC, to the extent pertinent, are applicable to such partnership actions.

(b) Definitions. As used in this Appendix,

(1) the term “partnership” means a partnership as defined in Code Section 6231 (a)(1);

(2) a “partnership action” is either an “action for readjustment of partnership items” under Code Section 6226 or an action for “adjustment with respect to partnership items” under Code Section 6228;

(3) the term “partnership item” means any item described in Code Section 6231 (a)(3);

(4) the term “tax matters partner” means the person who is the tax matters partner under Code Section 6231 (a)(7) or appointed tax matters partner by the court under Rule 9 of this Appendix, and who under this Appendix is responsible for keeping each partner fully informed of the partnership action (see Code Sections 6223 (g) and 6230 (f));

(5) a “notice of final partnership administrative adjustment” is the notice described in Code Section 6223 (a)(2);

(6) the term “administrative adjustment request” means a request for an administrative adjustment of partnership items filed by the tax matters partner on behalf of the partnership under Code Section 6227 (c);

(7) the term “partner” means a person who was a partner as defined in Code Section 6231 (a)(2) at any time during any partnership taxable year at issue in a partnership action;

(8) the term “notice partner” means a person who is a notice partner under Code Section 6231 (a)(8);

(9) the term “5-percent group” means a 5-percent group as defined in Code Section 6231 (a)(11);

(10) the term “deposit” means the deposit required by Code Section 6226 (e)(1); and

(11) the term “Notice of Assignment” means the notice mailed to the parties by the clerk of the court after the filing of a complaint that advises the parties of the name of the judge to whom the proceeding is assigned.

(c) Jurisdictional Requirements. The court does not have jurisdiction over a partnership action under this Appendix unless the following conditions are satisfied:

(1) Actions for Readjustment of Partnership Items.

(A) The Commissioner of Internal Revenue (Commissioner) has issued a notice of final partnership administrative adjustment (see Code Sections 6226 (a), (b)).

(B) A complaint for readjustment of partnership items is filed with the court by the tax matters partner within the period specified in Code Section 6226 (a), or by a notice partner (or 5 percent group) subject to the conditions and within the period specified in Code Section 6226 (b).

(C) The partner or partners filing the complaint make a deposit as required by Code Section 6226 (e).

(2) Actions for Adjustment of Partnership Items.

(A) The Commissioner has not allowed all or some of the adjustments requested in an administrative adjustment request (see Code Section 6228 (a)).

(B) A complaint for adjustment of partnership items is filed with the court by the tax matters partner subject to the conditions and within the period specified in Code Sections 6228 (a)(2) and (3).

(d) Form and Style of Papers. All papers filed in a partnership action shall be prepared in the form and style set forth in RCFC 5.2 and l0(a), except that the caption shall state the name of the partnership and the full name and surname of any partner filing the complaint and shall indicate whether such partner is the tax matters partner, as for example, “ABC Partnership, Mary Doe, Tax Matters Partner, Complainant” or “ABC Partnership, Richard Roe, A Partner Other Than the Tax Matters Partner, Complainant.”

(a) Commencement of Action. A partnership action shall be commenced by filing a complaint with the court. See RCFC 3, relating to commencement of case; RCFC 5.2 and 10, relating to form of pleadings; and RCFC 5.3(d), relating to number of copies to be filed.

(b) Contents of Complaint. Each complaint shall be titled either “Complaint for Readjustment of Partnership Items under Code Section 6226” or “Complaint for Adjustment of Partnership Items under Code Section 6228.” Each such complaint shall contain the information described in subdivision (c) below and the allegations described in subdivision (d) or (e) below.

(c) All Complaints. All complaints in partnership actions shall contain

(1) the name and address of the complainant;

(2) the name, employer identification number, and principal place of business of the partnership and of each partner filing the complaint at the time the complaint is filed; and

(3) the city and state of the office of the Internal Revenue Service with which the partnership’s return for the period in controversy was filed.

(d) Complaint for Readjustment of Partnership Items. In addition to including the information specified in subdivision (c), a complaint for readjustment of partnership items shall also contain the following:

(1) All Complaints. All complaints for readjustment of partnership items shall contain

(A) the date of the notice of final partnership administrative adjustment and the city and state of the office of the Internal Revenue Service that issued the notice;

(B) the year or years or other periods for which the notice of final partnership administrative adjustment was issued;

(C) clear and concise statements of each and every error that the complainant alleges to have been committed by the Commissioner in the notice of final partnership administrative adjustment. The assignments of error shall include issues, if any, in respect to which the burden of proof is on the United States. Any issues not raised in the assignments of error, or in the assignments of error in any amendment to the complaint, shall be deemed to be conceded. Each assignment of error shall be set forth in a separately lettered subdivision;

(D) clear and concise lettered statements of the facts on which the complainant bases the assignments of error, except with respect to those assignments of error, if any, as to which the burden of proof is on the United States;

(E) the amount of the deposit made by each partner filing the complaint;

(F) the date and place of the making of each deposit;

(G) a prayer setting forth relief sought by the complainant;

(H) the signature, mailing address, and telephone number of each complainant or of each complainant’s counsel (see RCFC 83.1 regarding attorneys of record); and

(I) a copy of the notice of final partnership administrative adjustment, which shall be appended to the complaint and with which there shall be included so much of any statement accompanying the notice as is material to the issues raised by the assignments of error. If the notice of final partnership administrative adjustment or any accompanying statement incorporates by reference any prior notices, or other material furnished by the Internal Revenue Service, such parts thereof as are material to the assignments of error likewise shall be appended to the complaint.

(2) Complaints by Tax Matters Partner. In addition to including the information specified in paragraph (1) of this subdivision, a complaint filed by the tax matters partner during the time period specified in Code Section 6226 (b) shall also contain a separate numbered paragraph stating that the complainant is the tax matters partner.

(3) Complaints by Other Partners. In addition to including the information specified in paragraph (1) of this subdivision, a complaint filed by a notice partner or by a 5-percent group during the time period specified in Code Section 6226 (b) shall also contain

(A) a separate numbered paragraph stating that the complainant is a notice partner or a representative of a 5-percent group (see Code Section 6226 (b)(1));

(B) a separate numbered paragraph setting forth facts establishing that the complainant satisfies the requirements of Code Section 6226 (d);

(C) a separate numbered paragraph stating the name and current address of the tax matters partner; and

(D) a separate numbered paragraph stating that the tax matters partner has not filed a complaint for readjustment of partnership items within the period specified in Code Section 6226 (a).

Under subdivision (d)(1)(H) above, the representative of a 5 percent group may sign a complaint on behalf of all members of the group. In such circumstances, the complaint shall contain a separate numbered paragraph stating that the representative has been duly authorized to sign on behalf of all members of the group.

(e) Complaint for Adjustment of Partnership Items. In addition to including the information specified in subdivision (c) above, a complaint for adjustment of partnership items shall also contain

(1) a statement that the complainant is the tax matters partner;

(2) the date that the administrative adjustment request was filed and any other proper allegations showing jurisdiction in the court in accordance with the requirements of Code Sections 6228 (a)(1) and (2);

(3) the year or years or other periods to which the administrative adjustment relates;

(4) the city and state of the office of the Internal Revenue Service with which the administrative adjustment request was filed;

(5) a clear and concise statement describing each partnership item on the partnership return that is sought to be changed, and the basis for each such requested change. Each such statement shall be set forth in a separately lettered paragraph;

(6) clear and concise lettered statements of the facts on which the complainant relies in support of such requested changes in treatment of partnership items;

(7) a prayer setting forth relief sought by the complainant;

(8) the signature, mailing address, and telephone number of the complainant or the complainant’s counsel (see RCFC 83.1 regarding attorneys of record); and

(9) a copy of the administrative adjustment request appended to the complaint.

(f) Notice of Filing.

(1) Complaints by the Tax Matters Partner. Within 5 days after receiving the Notice of Assignment from the clerk, the tax matters partner shall serve notice of the filing of the complaint on each partner in the partnership as required by Code Section 6223 (g). Said notice shall include the docket number assigned to the case by the court and the date of the Notice of Assignment.

(2) Complaints by Other Partners. Within 5 days after receiving the Notice of Assignment from the clerk, the complainant shall serve a copy of the complaint on the tax matters partner and at the same time notify the tax matters partner of the docket number assigned to the case by the court and of the date of the Notice of Assignment. Within 5 days after receiving a copy of the complaint and of the aforementioned notification from the complainant, the tax matters partner shall serve notice of the filing of the complaint on each partner in the partnership as required by Code Section 6223 (g). Said notice shall include the docket number assigned to the case by the court and the date of the Notice of Assignment.

(g) A Copy of the Complaint to Be Provided to All Partners. Upon request by any partner in the partnership as referred to in Code Section 6231 (a)(2)(A), the tax matters partner shall, within 10 days after receipt of such request, make available to such partner a copy of any complaint filed by the tax matters partner or by any other partner.

(h) Joinder of Parties.

(1) Permissive Joinder. A separate complaint shall be filed with respect to each notice of final partnership administrative adjustment or each administrative adjustment request issued to separate partnerships. However, a single complaint for readjustment of partnership items or complaint for adjustment of partnership items may be filed seeking readjustments or adjustments of partnership items with respect to more than one final partnership administrative adjustment or administrative adjustment request if the notices or requests pertain to the same partnership. A complaint may include a request that the proceeding be assigned to the judge to whom one or more pending cases (whether relating to the same partnership or to another partnership) are assigned, if the other case or cases present common or related issues of law or fact. For the procedures to be followed by partners who wish to intervene or participate in a partnership proceeding, see Rule 4 below.

(2) Severance or Other Orders. With respect to a case based upon multiple notices of final partnership administrative adjustment or administrative adjustment requests, the court may order a severance and a separate case to be maintained with respect to one or more of such notices or requests whenever it appears to the court that proceeding separately is in furtherance of convenience, or will avoid prejudice, or when separate trials will be conducive to expedition or economy.

(a) Answer. The United States shall file an answer or shall move with respect to the complaint within the periods specified in and in accordance with the provisions of RCFC 12.

(b) Reply. For provisions relating to the filing of a reply, see RCFC 7(a).

(a) Tax Matters Partner. The tax matters partner may intervene in an action for readjustment of partnership items brought by another partner or partners by filing a notice of election to intervene with the court. Such notice shall state that the intervenor is the tax matters partner and shall be filed within 45 days after the date of the Notice of Assignment (see Code Section 6226 (b)(6) and Rule 2 (d)(2) of this Appendix).

(b) Other Partners. Any other partner who satisfies the requirements of Code Section 6226 (d) or 6228 (a)(4)(B) may participate in the action by filing a notice of election to participate with the court. Such notice shall set forth facts establishing that such partner satisfies the requirements of Code Section 6226 (d) in the case of an action for readjustment of partnership items, or Code Section 6228 (a)(4)(B) in the case of an action for adjustment of partnership items, and shall be filed within 45 days after the date of the Notice of Assignment. A single notice may be filed by two or more partners; however, each such partner must satisfy all requirements of this paragraph in order for the notice to be treated as filed by or for that partner.

(c) Enlargement of Time. The court may grant leave to file a notice of election to intervene or a notice of election to participate out of time upon a showing of sufficient cause.

(d) Pleading. No assignment of error, allegation of fact, or other statement in the nature of a pleading shall be included in the notice of election to intervene or notice of election to participate.

(e) Amendments to the Complaint. A party other than the complainant who is authorized to raise issues not raised in the complaint may do so by filing an amendment to the complaint. Such an amendment may be filed, without leave of court, at any time before service of the response to the complaint by the United States. Otherwise, such an amendment may be filed only by leave of court. See RCFC 15(a) for the timing for filing responses to amendments to the complaint.

(a) Complaints. All complaints shall be served by the clerk on the United States.

(b) Papers Issued by the Court. All papers issued by the court shall be served by the clerk on the United States, the tax matters partner (whether or not the tax matters partner is a participating partner), and all other participating partners.

(c) All Other Papers. All other papers required to be served (see RCFC 5) shall be served by the parties filing such papers. Whenever a paper (other than the complaint) is required to be filed with the court, the original paper shall be filed with the court with certificates by the filing party or the filing party’s counsel that service of the paper has been made on each of the parties set forth in subdivision (b) above or on such other parties’ counsel.

(a) In General. For purposes of this Appendix, the United States, the partner who filed the complaint, the tax matters partner, and each person who satisfies the requirements of Code Sections 6226 (c) and (d) or Section 6228 (a)(4) shall be treated as parties to the action.

(b) Participating Partners. Participating partners include the partner who filed the complaint and such other partners who have filed either a notice of election to intervene or a notice of election to participate in accordance with the provisions of RCFC 4. See Code Sections 6226 (c), 6228 (a)(4)(A). For purposes of the court’s procedural rules other than those set forth in this Appendix, only participating partners, as defined in this subdivision, and the United States shall be considered to be parties.

(a) Consent by the Tax Matters Partner to Entry of Decision. A stipulation consenting to entry of decision executed by the tax matters partner and filed with the court shall bind all parties. The signature of the tax matters partner constitutes a certificate by the tax matters partner that no party objects to entry of the decision. See Rule 10 below.

(b) Settlement Agreements Entered Into by All Participating Partners or No Objection by Participating Partners.

(1) After expiration of the time within which to file a notice of election to intervene or to participate under Rule 4 (a) or (b) above, the United States shall move for entry of decision and shall submit a proposed form of decision with such motion, if

(A) all of the participating partners have entered into a settlement agreement with defendant, or all of such partners do not object to the granting of defendant’s motion for entry of decision, and

(B) the tax matters partner (if a participating partner) agrees to the proposed decision in the case but does not certify that no party objects to the granting of defendant’s motion for entry of decision.

(2) Within 3 days after the date on which the defendant’s motion for entry of decision is filed with the court, defendant shall serve on the tax matters partner a certificate showing the date on which the defendant’s motion was filed with the court.

(3) Within 3 days after receiving defendant’s certificate, the tax matters partner shall serve on all other parties to the action, other than the participating partners, copies of defendant’s motion for entry of decision, the proposed decision, and defendant’s certificate showing the date on which defendant’s motion was filed with the court, as well as a copy of this paragraph of Rule 7.

(4) If any party objects to the granting of the defendant’s motion for entry of decision, then that party shall, within 60 days after the date on which defendant’s motion was filed with the court, file a motion for leave to file a notice of election to intervene or to participate, accompanied by a separate notice of election to intervene or to participate, as the case may be. If no such motion is filed with the court within such period, or if the court should deny such motion, then the court may enter the proposed decision as its decision in the partnership action. See Code Sections 6226 (f) and 6228 (a)(5).

(c) Other Settlement Agreements. If a settlement agreement is not within the scope of subdivision (b) above, then

(1) in the case of a participating partner, defendant shall promptly file with the court a notice of settlement agreement that identifies the participating partner or partners who have entered into the settlement agreement; and

(2) in the case of any partner who enters into a settlement agreement, defendant shall, within 7 days after the settlement agreement is executed by both the partner and defendant, serve on the tax matters partner a statement which sets forth

(A) the identity of the party or parties to the settlement agreement and the date of the agreement;

(B) the year or years to which the settlement agreement relates; and

(C) the terms of settlement as to each partnership item and the allocation of such items among the partners.

Within 7 days after receiving the statement required by this subdivision, the tax matters partner shall serve a copy of the statement on all parties to the action.

(a) Amendment of Complaint. If, after the filing of a complaint for adjustment of partnership items (see Code Section 6228 (a) and Rule 2 (a) above), but before hearing of such complaint, the Commissioner mails to the tax matters partner a notice of final partnership administrative adjustment for the partnership taxable year to which the complaint relates, such complaint shall be treated as a complaint in an action for readjustment of the partnership items to which such notice relates. The complainant, within 90 days after the date on which the notice of final partnership administrative adjustment is mailed to the tax matters partner, shall file an amendment to the complaint, setting forth every error the complainant alleges to have been committed by the Commissioner in the notice of final partnership administrative adjustment, and the facts on which the complainant bases the assignments of error. A copy of the notice of final partnership administrative adjustment shall be appended to the amendment to the complaint. On or before the date the amendment to the complaint is delivered to the court, or, if the amendment is mailed to the court, on or before the date of mailing, the tax matters partner shall serve notice of the filing of the amendment to the complaint on each partner in the partnership as required by Code Section 6223 (g).

(b) Participation. Any partner who has filed a timely notice of election to participate in the action for adjustment of partnership items shall be deemed to have elected to participate in the action for readjustment of partnership items and need not file another notice of election to do so. Any other partner may participate in the action by filing a notice of election to participate within 45 days after the date of filing of the amendment to complaint. See Rule 4 above.

(a) Appointment of Tax Matters Partner. If, at the time of commencement of a partnership action by a partner other than the tax matters partner, the tax matters partner is not identified in the complaint, the court will take such action as may be necessary to establish the identity of the tax matters partner or to effect the appointment of a tax matters partner.

(b) Removal of Tax Matters Partner. After notice and opportunity to be heard, the court may for cause remove a partner as the tax matters partner. If the tax matters partner is removed by the court, or if a partner’s status as tax matters partner is terminated for reason other than removal by the court, the court may appoint another partner as the tax matters partner if the partnership fails to designate a successor tax matters partner within such period as the court may direct.

A decision entered by the court in a partnership action shall be binding on all parties. For the definition of parties, see Rule 6 above.

This appendix is new. Section 6226 of the Internal Revenue Code grants this court jurisdiction, along with the United States Tax Court and the United States district courts, to consider petitions for readjustment of partnership items as set forth in a final partnership administrative adjustment. Appendix F provides the procedural rules for such cases. In the interests of uniformity, the rules contained in Appendix F parallel the rules applicable to these cases in the United States Tax Court.