Tax Court Holds that a Notice Received and Challenged is Valid Notwithstanding that it was Sent to the Wrong Partnership Representative and Wrong Address, Mammoth Cave Opinion
March 10, 2026. – The Internal Revenue Service (IRS) issues three principal notices when it examines a partnership tax return under BBA procedures (i.e., a tax examination of a partnership generally of tax years 2018 and later subject to rules enacted in the Bipartisan Budget Act of 2015). These notices inform the partnership of various events in the lifecycle of the examination. They are (1) the Notice of Administrative Proceeding (NAP), which informs that an administrative proceeding has begun, I.R.C. § 6231(a)(1); (2) the Notice of Proposed Partnership Adjustment (NOPPA), which informs of proposed adjustments to the income tax return, I.R.C. § 6231(a)(2); and (3) the Notice of Final Partnership Adjustment (FPA), which informs of the IRS’s final adjustments to the income tax return and is the “ticket” for judicial review, I.R.C. § 6231(a)(3). The statute says that the IRS “shall” mail the NAP, NOPPA, and FPA to the partnership and partnership representative. I.R.C. § 6231(a).
In Mammoth Cave Properties, LLC v. Commissioner, 166 T.C. No 4 (2026), the United States Tax Court, in a unanimous, court-reviewed opinion, held that an FPA was timely notwithstanding that the NOPPA upon which it was based was not sent to the correct partnership representative and sent to a prior address. The court analogized the FPA to a Notice of Final Partnership Administrative Adjustment (FPAA) in the context of TEFRA procedures, stating that the FPA, like an FPAA, is a jurisdictional notice to initiate a court proceeding to readjust the items determined by the IRS. The court said that while the NOPAA was not a jurisdictional notice, the NOPPA triggered the calculation for a request to modify an imputed underpayment. Akin to the “no harm, no foul” playground rule, the court held that the NOPPA was valid because the partnership received it, challenged its adjustments through a timely modification request, and continued to use the prior address. Therefore, the FPA provided the requisite minimum notice required and was timely.
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If you receive an IRS notice such as a NAP, NOPPA, or FPA and need assistance, the team at K. Tyson Law can help. Our team has experience in tax examinations and litigation of partnership issues.
Written by Kim Tyson.