The IRS is conducting an examination of the returns of Aggressivity, Ltd., a partnership in which Nellie Neglect is a 10-percent partner and also the designated Tax Matters Partner (TMP). The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA; P.L. 97-248) procedures have been scrupulously followed by the IRS, and a Final Partnership Administrative Adjustment (FPAA) was issued to Nellie on June 18, 2009, for the 2007 taxable year. The FPAA provided that the TMP had 90 days in which to file a petition for judicial review of the FPAA.

On the same day, the IRS sent copies of the FPAA to all notice partners as required by the TEFRA provisions. All of these partners assume that Nellie would be filing a petition for judicial review on behalf of the partnership, because she had previously advised them of that strategy. For that reason, none of the other partners ever filed a petition for judicial review.

Unfortunately, Nellie got occupied with other things and failed to file the petition by September 17, 2009. However, on November 12, 2009, Nellie realized her error and quickly filed a petition for judicial review of the FPAA with the Court of Federal Claims.

The IRS, in responding to the petition, files a motion to dismiss for lack of jurisdiction with the Court on two separate grounds:

(A) Nellie did not file a petition for readjustment within the 90 days of the FPAA as required by Code Sec. 6226(a).

(B) Nellie the TMP in petitioning the Court only made a deposit of the tax liability, not the interest. Thus, she failed to meet the jurisdictional requirements of Code Sec. 6226(e)(1).

Which party should prevail?

Constance C. Enshus, the limited partner in Bilda Brickhouse, a real estate partnership, received a copy of financial information prepared by the general partners of the partnership. In reviewing the information, Connie finds what she believes should be an additional deduction for the partnership for the preceding year. Connie writes to the general partner (who is also the TMP) asking that he prepare an amended return. The general partner disagrees with Connie and informs her of his decision. Connie still believes she is right and proceeds to file a Request for Administrative Adjustment (RAA) seeking a refund of $4,050, her proportionate share of the refund due as a result of the adjustment at the partnership level. Connie is notified by the IRS on September 16, 2009, that her RAA has been treated as requesting a refund for a nonpartnership item.

(A) Assuming the IRS decides the TMP was correct and no refund is allowable, what is the last day that Connie can commence an action in federal court to litigate the matter?

(B) What action, if any, is required as a condition precedent to Connie's commencing legal action?

(C) Does it matter that the partnership has elected to be governed by the large partnership rules?