A finished ACC-681 Topic 6 examination path comparison example, tracing an individual deficiency case to the Tax Court and a partnership adjustment through the centralized audit regime, with every deadline cited. Searches like "acc 681 topic 6 assignment example", "acc681 topic 6 sample" and "acc-681 topic 6 example" land here.
What a finished ACC-681 Topic 6 examination path comparison looks like
The finished comparison sets the two cases in parallel columns, all figures illustrative. Her own examination proposes disallowing an $18,000 deduction for a donated painting because no qualified appraisal was obtained, and the examiner computes a $4,300 deficiency. That path runs from the examination report and 30-day letter to a conference with the Independent Office of Appeals, then a statutory notice of deficiency under section 6212, after which section 6213(a) gives 90 days to petition the Tax Court without paying first. The partnership could not elect out of the centralized audit rules, because one of its partners is itself a partnership. A proposed $400,000 adjustment is therefore handled by the partnership representative under section 6223, with 270 days to seek modification, a push-out election due within 45 days of the final notice, and 90 days to petition.
How an ACC-681 Topic 6 example is structured
The comparison is built as two timelines sharing one axis, so each individual stage sits beside its partnership counterpart. It opens by identifying who the IRS deals with in each: the physician, and for the partnership its representative, whose actions bind every partner. The next rows follow the individual case through the report, Appeals and the statutory notice, noting that assessment is barred while a petition can be filed, and that the small tax case procedure of section 7463 is available at this amount. The partnership rows follow the proposed adjustment, the modification window and the final notice, then explain that an imputed underpayment falls on the partnership in the year the adjustment is final unless the push-out election moves it to the partners. A limitations row cites section 6501 for her return and section 6235 for the partnership. A closing section handles a prior-year error found in preparation.
Who the IRS deals with
The physician answers her own examination, while the partnership's case belongs to its representative, whose settlement or petition binds her whether or not she agrees.
The deficiency path to the Tax Court
Unless Appeals settles it, the statutory notice under section 6212 opens a 90-day window to petition without paying, and assessment waits until that window closes or the case ends.
An adjustment assessed at the partnership
Absent a push-out election, the imputed underpayment is paid by the partnership in the adjustment year, so today's partners carry the cost of an earlier year.
Modification and push-out windows compared
Partners filing amended returns can reduce the imputed underpayment within the 270-day modification window, while section 6226 moves the adjustment to the reviewed-year partners instead.
A prior-year omission handled under Circular 230
Finding unreported interest from an earlier year, the practitioner advises the client of the omission and its consequences, as section 10.21 requires, and makes no misleading statement to the examiner.
Where marks go in ACC-681 Topic 6
Collapsing both cases into one timeline is where most credit goes, since a paper that sends the partnership adjustment through a notice of deficiency has applied the individual procedure to a regime with its own procedure. The reverse error treats the physician as a party to the partnership case with a right to settle, when section 6223 gives that authority to the representative alone. Deadlines given without the section that sets them are hard to credit. Papers that describe the imputed underpayment without saying who bears it miss that a partner admitted after the reviewed year could pay for it. Omitting the refund route through a district court or the Court of Federal Claims makes the Tax Court look like the only forum. The Circular 230 point is lost if the omission is concealed, or reported without the client's decision.
Get an ACC-681 Topic 6 example written to your instructions
Send the ACC-681 Topic 6 instructions, the rubric and the examination facts your section assigned. We write a custom example to them, with each case followed from selection to its last contestable point, the parties and deadlines cited to their sections, who bears the cost identified and any practitioner duty stated, returned in 24 to 48 hours. The first one is free.
ACC-681 Topic 6 questions, answered
Why could the partnership not elect out of the centralized audit rules?
Section 6221(b) allows the election only for a partnership with 100 or fewer partners, each of them an eligible partner such as an individual, a C corporation, an S corporation or an estate of a deceased partner, and it is made year by year on a timely filed return. A partnership holding an interest is not eligible, so one partnership partner keeps the whole medical office partnership inside the regime.
Does the physician have to pay before going to court?
Not in her own case. A timely Tax Court petition lets her contest the deficiency without paying, which is the main reason the 90-day window matters. The alternative route is to pay, file a refund claim and sue in a district court or the Court of Federal Claims under sections 7422 and 6532 once the claim is denied or has waited six months.
Must the practitioner tell the IRS about the prior-year omission?
No. Circular 230 section 10.21 requires the practitioner to advise the client promptly of the omission and of its consequences under the law, and the decision to correct it stays with the client. What the practitioner may not do is make false or misleading statements during the examination, and a client's refusal can raise the question of whether to continue the engagement.