Tax Court in Brief | Katanga Properties, LLC v. Comm’r | BBA Limitations Period and Form 872–M Extensions

Katanga Properties, LLC, R. Brent Evans, Partnership Representative v. Commissioner, 167 T.C. No. 10 | September 9, 2026 | Weiler, J. | Docket No. 9439-25

Short Summary

Katanga Properties, LLC is an LLC treated as a partnership and subject to the centralized partnership audit regime created by the Bipartisan Budget Act of 2015. It filed its 2020 Form 1065 on June 10, 2021, and designated R. Brent Evans as its partnership representative on Form 8979. The IRS issued a Notice of Selection for Examination on May 27, 2022. The partnership signed a Form 872–M, Consent to Extend the Time to Make Partnership Adjustments, on January 27, 2023, and the IRS countersigned on February 21, 2023, extending the section 6235(a)(1) period to May 30, 2025.

The IRS issued a Notice of Proposed Partnership Adjustment on April 16, 2024. The partnership didn’t request modification of the imputed underpayment, and the 270-day modification window closed on January 13, 2025. The IRS mailed the Notice of Final Partnership Adjustment on March 25, 2025, disallowing a charitable contribution deduction claimed for 2020. Katanga petitioned on June 23, 2025, alleging the FPA came too late, and moved for summary judgment. The Court denied the Motion.

Key Issues

Whether the paragraphs of section 6235(a) operate as a sequence assigning separate deadlines to the NOPPA and the FPA, or as alternatives from which the latest date controls. And whether an extension agreement under section 6235(b), executed on Form 872–M, extends only the time to issue a NOPPA or extends the period for making partnership adjustments generally, including the FPA.

Primary Holdings

The FPA issued to Katanga was timely under section 6235(a)(1) and (b). Section 6235(a) permits the Commissioner to make an adjustment at any time before the latest of the dates in paragraphs (1), (2), and (3), and an agreed extension under section 6235(b) extends the period described in subsection (a) as a whole. Because the Form 872–M moved the section 6235(a)(1) date to May 30, 2025, and that date falls after the March 12, 2025, date supplied by section 6235(a)(3), the FPA mailed March 25, 2025, was timely.

Key Points of Law

Section 6235(a) bars an adjustment “after the later of” three paragraphs joined by “or.” Judge Weiler treated that language as disjunctive and read the paragraphs as alternatives, consistent with Mammoth Cave Property, LLC v. Commissioner, No. 5401-24, 166 T.C. (Mar. 9, 2026), and JM Assets, LP v. Commissioner, 165 T.C. 1 (2025). A statute’s words are read in context and with a view to their place in the overall scheme. Davis v. Michigan Department of Treasury, 489 U.S. 803, 809 (1989).

And section 6235(b) permits the Secretary and the partnership to extend “the period described in subsection (a).” That reaches the full subsection rather than a single paragraph within it, so an extension must be carried into the comparison that identifies the latest of paragraphs (1), (2), and (3).

Section 6231(b) doesn’t create a separate limitations regime for mailing notices. Subparagraph (A) sets the earliest date an FPA may be mailed, generally 270 days after the NOPPA, and subparagraph (B) points back to section 6235 for the outer limit. The word “adjustment” in section 6235 is broad enough to include the process by which the Commissioner makes one, first proposed in a NOPPA and then final in an FPA.

But footnote 6 carries a caution worth reading twice. Sections 6231(b)(2) and 6235(a)(3) together produce a window of at least 60 days in which an FPA may issue, but the Court expressly declined to read that as barring an FPA on day 331 or later where the limitations period remains open.

On procedure, a taxpayer raising an expired limitations period must show that it filed the return and that the period has run. Robinson v. Commissioner, 57 T.C. 735, 737 (1972). Summary judgment requires no genuine dispute of material fact and entitlement to judgment as a matter of law, with inferences drawn against the movant. Rule 121(a)(2); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992).

Insight

Practitioners tend to discuss a Form 872–M as a housekeeping item that gives the examiner room to finish a NOPPA. Katanga shows the consent doing considerably more work than that. Extending section 6235(a)(1) resets the outer boundary for the whole adjustment process, and the FPA rides along for as many months as the consent grants. A partnership that signs a consent believing it has capped the government’s time at 330 days after the NOPPA has miscounted, and the miscount is the difference between a live case and a dead one.

And there’s a second point buried in footnote 6. The 330-day period in section 6235(a)(3) is a floor beneath the Commissioner rather than a ceiling above him. If the section 6235(a)(1) clock is still running, day 331 is fair game. Anyone building a limitations defense in a BBA case should chart all three paragraphs, add every executed extension, and take the latest date rather than the most convenient one. The IRS publishes an overview of the regime through its BBA centralized partnership audit regime materials, and the opinion itself is available through the Court’s opinion search.

This case was decided on a summary judgment motion, so the charitable contribution deduction itself remains to be litigated. The Court stated its facts solely for purposes of the Motion, and an appropriate order will be issued.

More weekly coverage is collected in The Tax Court in Brief. Freeman Law’s Tax Court litigation attorneys represent partnerships through BBA examinations and the petitions that follow them.

The information in this article is for general educational purposes only and is not legal advice. Reading it does not create an attorney-client relationship with Freeman Law. Every matter turns on its own facts, and you should consult a qualified tax attorney about your circumstances.