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Publicly-Traded Partnerships Termination Closing Agreement

Under section 7121 of the Internal Revenue Code, [taxpayer name and EIN number]; acting through its duly authorized Tax Matters Partner, [name and social security number/EIN number] (collectively referred to as “Taxpayer”), and the Commissioner of Internal Revenue make the following Closing Agreement:

  WHEREAS, the Taxpayer experienced a technical termination on [date of technical termination];

  WHEREAS, the technical termination resulted in a short taxable year that began on January 1, [year] and ended on [date of technical termination];

  WHEREAS, due to publicly traded aspect of the partnership the Taxpayer is only able to identify its partners at the end of the calendar year through information provided by the brokerage companies that traded interests in the Taxpayer;

THEREFORE, IT IS HEREBY DETERMINED AND AGREED THAT:

1. On or before [date], Taxpayer must file a Form 1065 for the short taxable year January 1, [year] through [date of technical termination].  No Schedules K-1 need to be filed with the Form 1065.
2. On or before [date], Taxpayer must file a Form 1065 for the short taxable year [day after date of technical termination] through December 31, [year].
3. A combined Schedule K-1 for each partner who owned an interest in the Taxpayer for all or any portion of the [year] calendar year will be issued by the Taxpayer to those partners and filed with the Internal Revenue Service by the Taxpayer as part of its Form 1065 for the short taxable year that began [day after technical termination] and ended on December, 31 [year]. 
4. Taxpayer will report all items on the combined Schedule K-1 described in paragraph 3, above, in the same manner as if those items would have been reported if separate Schedules K-1 had been filed for each of the two short taxable periods.  The totals on the combined Schedules K-1 will equal the cumulative totals reportable on the two separate Schedules K-1 had separate schedules been filed. 
5. No penalty will be assessed against the Taxpayer for failure to issue to its partners or file with the Internal Revenue Service separate Schedules K-1 covering the period January 1, [year] through [technical termination date], or the period [day after date of technical termination through December 31, [year], other than those described in paragraph 3, above.
6. The filing and issuance of the Schedules K-1 described in paragraph 3, above, on or before the Form 1065 due date,set forth in paragraph 2 above,  for the short taxable year ending December 31, [year], will be deemed to be timely and no penalties under Internal Revenue Code Sections 6721 and 6722 will be imposed. 

THIS AGREEMENT IS FINAL AND CONCLUSIVE EXCEPT:

(1) The matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of a material fact;
(2) It is subject to the Internal Revenue Code sections that expressly provide that effect be given to their provisions (including any stated exception for section 7122) notwithstanding any other law or rule of law; and
(3) If it relates to a tax period ending after the date of this Closing Agreement, it is subject to any law, enacted after that date that applies to that tax period.

By signing, the parties certify that they have read and agree to the terms of this Closing Agreement.

Page Last Reviewed or Updated: 27-Nov-2013