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is brought under either section 6226(a) or (b) each person who
was a partner in such partnership at any time during the year in
issue shall be treated as a party to such action. However,
section 6226(d)(1)(A) provides, in pertinent part, that section
6226(c) shall not apply to a partner "after the day" on which the
partnership items of such partner for the particular partnership
taxable year become nonpartnership items by reason of one of the
events described in section 6231. A settlement agreement between
the Secretary and a partner is among the events causing the
conversion of partnership items into nonpartnership items. Sec.
6231(b)(1)(C). Section 6224(c) provides that in the absence of a
showing of fraud, malfeasance, or misrepresentation of fact a
settlement agreement between the Secretary and a partner with
respect to the determination of partnership items for any
partnership taxable year shall be binding on all parties to such
agreement.
Whether, with respect to the Nirschls, we have jurisdiction
over their partnership items depends upon whether they entered
into a binding settlement agreement with respondent. Underlying
that question is whether the period of limitations for making an
assessment may have run.
Settlement Agreements in TEFRA Proceedings
General principles of contract law govern the settlement of
tax cases. Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320,
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Last modified: May 25, 2011