Sec. 205. Treatment of failure of partnership To pay imputed underpayment
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/bill/114/hr/6439/ih/section-205·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 6232 is amended by adding at the end the following new subsection: If any amount of any imputed underpayment to which section 6225 applies or which is described in section 6226(b)(4)(A)(ii)(I) (or any interest or penalties with respect to any such amount) has not been paid by the date which is 10 days after the date on which the Secretary provides notice and demand for such payment— section 6621(a)(2)(B) shall be applied by substituting 5 percentage points for 3 percentage points with respect to such amount, and the Secretary may assess upon each partner of the partnership (determined as of the close of the adjustment year) a tax equal to such partner’s proportionate share of such amount (including any such interest or penalties, determined after application of subparagraph (A)).
For purposes of paragraph (1), a partner’s proportionate share is such percentage as the Secretary may determine on the basis of such partner’s distributive share of items under section 702. The Secretary shall make determinations under the preceding sentence such that the aggregate proportionate shares so determined total 100 percent. The liability of the partnership for any amount with respect to which a partner is made liable under paragraph
(1)shall be reduced upon payment by the partner of such amount. Paragraph (1)(B) shall not apply with respect to any amount after the date on which such amount is paid by the partnership. For purposes of this subsection, an S corporation and its shareholders shall be treated in the same manner as a partnership and its partners. Subchapter B shall not apply to any assessment or collection under this paragraph. Except as otherwise provided in this chapter, no assessment may be made with respect to any partner with respect to an amount under paragraph
(1)(and no levy or proceeding in any court for the collection of such amount may begin) after the date which is 2 years after the date on which the Secretary provides notice and demand to the partnership with respect to such amount. .