Changes of residence, changes of headquarters, changes in corporate structure, corporate/partnership  dissolution, bankruptcy, liquidation, and other occurrences that affect simple things like where an individual or business entity may receive mail occur every day.  As we deal with those changes, we are often vigilant in making sure that relatives, friends, customers, vendors, and other personal or business contacts are updated with the most current information to ensure that we do not miss a single communication, notice or delivery. 

   The IRS is often inadvertently omitted from the updating process, as was the case in Taurus FX Partners LLC v. Comr., T.C. Memo 2013-168 (7/22/13).  In Taurus FX Partners, the IRS issued a notice of final partnership administrative adjustment (FPAA) to a limited liability company (LLC) that was being treated as a partnership for federal tax purposes, sending copies to:  (1) the LLC at the address shown on the return for the year that was the subject of the FPAA, (2) the former tax matters partner (TMP) entity at the address shown on the return, (3) the former TMP at an address used on a subsequently filed return, (4) a notice partner (another LLC) at an address shown on the original return, and (5) to entities that owned interests in the TMP entity.  All notices were returned to the IRS by the postal service except the one sent to the former TMP at the address from the subsequently filed return.  The response filed by the sole member of the notice partner was deemed untimely although that member did not receive the FPAA at his last known address.

   The Tax Court stated that provision of an updated address on a subsequent return did not satisfy the requirements under the regulations in effect at that time to properly update the information for the return that was the subject of the FPAA.  The court explained that although the IRS may use other information in its possession, it is not obligated to search its records for information that is not expressly furnished on the subject return or pursuant to the regulations.

   Practitioners would do well to keep this in mind, and to refer to Regs. §301.6223(c)-1 for the correct procedures for furnishing additional information regarding partners to the IRS so that all appropriate parties receive notice of IRS proceedings.