§ 15-30-3401 — Definitions

15-30-3401 . Definitions. For purposes of this part, Title 15, chapter 30, part 26, and Title 15, chapter 31, part 5, the following definitions apply:
(1) "Administrative adjustment request" means an administrative adjustment request filed by a partnership under 26 U.S.C. 6227.
(2) "Direct partner" means a partner that holds an interest directly in a partnership or pass-through entity.
(3) "Exempt partner" means a partner that is exempt from taxation under 15-31-102 .
(4) "Federal adjustment" means a change to an item or amount determined under the Internal Revenue Code that is used by a taxpayer to compute the Montana income tax owed, regardless of whether that change results from action by the internal revenue service, including a partnership level audit, or the filing of an amended federal return, federal refund claim, or an administrative adjustment request by the taxpayer.
(5) "Federal adjustments report" includes methods or forms required by the department for use by a taxpayer to report final federal adjustments, including an amended Montana tax return, information return, or a uniform multistate report.
(6) "Federal partnership representative" means the person the partnership designates for the tax year as the partnership's representative, or the person the internal revenue service has appointed to act as the federal partnership representative, pursuant to 26 U.S.C. 6223(a).
(7) "Final determination date" means:
(a) except as provided in subsections (7)(b) and (7)(c), if the federal adjustment arises from an internal revenue service audit or other action by the internal revenue service, the final determination date is the first day on which no federal adjustments arising from that audit or other action remain to be finally determined whether by internal revenue service decision with respect to which all rights of appeal have been waived or exhausted, by agreement, or, if appealed or contested, by a final decision with respect to which all rights of appeal have been waived or exhausted. For agreements required to be signed by the internal revenue service and the taxpayer, the final determination date is the date on which the last party signed the agreement.
(b) for federal adjustments arising from an internal revenue service audit or other action by the internal revenue service, if the taxpayer filed as a member of a combined report, the final determination date means the first day on which no related federal adjustments arising from that audit remain to be finally determined, as described in subsection (7)(a), for the entire group; or
(c) if the federal adjustment results from filing an amended federal return, a federal refund claim, or an administrative adjustment request or if it is a federal adjustment reported on an amended federal return or other similar report filed pursuant to 26 U.S.C. 6225(c), the final determination date means the day on which the amended return, refund claim, administrative adjustment request, or other similar report was filed.
(8) "Final federal adjustment" means a federal adjustment after the final determination date for that federal adjustment has passed.
(9) "Indirect partner" means a partner in a partnership or pass-through entity that itself holds an interest directly, or through another indirect partner, in a partnership or pass-through entity.
(10) "Partnership level audit" means an examination by the internal revenue service at the partnership level pursuant to Subchapter C of Title 26, Subtitle F, Chapter 63, of the Internal Revenue Code, as enacted by the Bipartisan Budget Act of 2015, Public Law 114-74, which results in federal adjustments.
(11) "Reallocation adjustment" means a federal adjustment resulting from a partnership level audit or an administrative adjustment request that changes the shares of one or more items of partnership income, gain, loss, expense, or credit allocated to direct partners. A positive reallocation adjustment means the portion of a reallocation adjustment that would increase federal income for one or more direct partners, and a negative reallocation adjustment means the portion of a reallocation adjustment that would decrease federal income for one or more direct partners pursuant to regulations under 26 U.S.C. 6225.
(12) "Resident partner" means an individual, trust, or estate partner that is a resident of Montana as defined in 15-30-2101 for the relevant tax period.
(13) "Reviewed year" means the tax year of a partnership that is subject to a partnership level audit from which federal adjustments arise.
(14) "Tiered partner" means any partner that is a partnership or pass-through entity.

Legislative History

En. Sec. 1, Ch. 108, L. 2021.