PARTNERSHIP RETURN TO BE DETERMINATIVE OF AUDIT PROCEDURES TO BE FOLLOWED.

SEC. 1232. PARTNERSHIP RETURN TO BE DETERMINATIVE OF AUDIT PROCEDURES TO BE FOLLOWED. (a) In General.—Section 6231 (relating to definitions and special rules) is amended by adding at the end the following new subsection: “(g) Partnership Return To Be Determinative of Whether Subchapter Applies.— “(1) Determination that subchapter applies.—If, on the basis of a partnership return for a taxable year, the Secretary reasonably determines that this subchapter applies to such partnership for such year but such determination is erroneous, then the provisions of this subchapter are hereby extended to such partnership (and its items) for such taxable year and to partners of such partnership. “(2) Determination that subchapter does not apply.—If, on the basis of a partnership return for a taxable year, the Secretary reasonably determines that this subchapter does not apply to such partnership for such year but such determination is erroneous, then the provisions of this subchapter shall not apply to such partnership (and its items) for such taxable year or to partners of such partnership.”. (b) Effective Date.—The amendment made by this section shall apply to partnership taxable years ending after the date of the enactment of this Act.