A final notice should be exactly what it claims to be — final. But a US Tax Court dismissal last month shows what can happen when the IRS sends a partnership two supposedly final notices for the same tax year.
In Arindel Farm LLC v. Commissioner, the IRS reportedly mailed a Florida horse-breeding partnership two nearly identical notices of final partnership adjustment, or FPAs, only two days apart — one on July 31, 2024, and another on Aug. 2, 2024.
Arindel Farm petitioned the Tax Court that October to contest the July 31 notice, which ultimately ended with a stipulated decision reflecting no adjustments or penalties. The court later dismissed the Aug. 2 notice proceeding for lack of jurisdiction, determining that, under Section 6231(c), the second notice was automatically rescinded because both FPAs related to the 2020 tax year.
The centralized partnership audit regime under the Bipartisan Budget Act of 2015 allows a defective notice to determine whether a court ever considers the merits. While Arindel managed to untangle this administrative knot, its case exposes a deeper, systemic issue where parallel notices create conflicting legal obligations and hidden procedural traps.