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is a partnership item.6 We have no jurisdiction to consider
partnership items in a partner-level deficiency proceeding. GAF
Corp. v. Commissioner, 114 T.C. 519 (2000); Maxwell v.
Commissioner, 87 T.C. 783 (1986). Therefore, we are bound by the
determination made at the partnership level that Mr. Blonien was
a partner in Finley Kumble.
Petitioners Have Not Been Deprived of Due Process
Petitioners argue that treating their allegation that Mr.
Blonien was not a partner as a “partnership item”, over which we
have no jurisdiction in this partner-level deficiency proceeding,
6We recognize that the determination of who is a partner can
be a partner-level item where resolution of the issue would not
affect the allocation of partnership items to the other partners.
In Katz v. Commissioner, 116 T.C. 5 (2001), we held that
allocation of a partnership distributive share between a partner
and the partner’s bankruptcy estate was properly a partner-level
item because the outcome of the dispute did not affect the
allocation of partnership items among the other partners.
Similarly, in Hang v. Commissioner, 95 T.C. 74 (1990), we held
that the determination whether a father was equitable owner of S
corporation shares held in the name of his sons is properly made
at the individual shareholder level rather than at the corporate
level in a TEFRA proceeding because the determination would not
affect the distributive shares of the other shareholders.
In the case at hand, if petitioners were successful in
arguing that Mr. Blonien was not a partner in Finley Kumble, then
the share of Finley Kumble’s COD income wrongly allocated to Mr.
Blonien would have to be reallocated among the other partners.
Because the Finley Kumble partnership-level proceeding is
completed, there may be no way to make the reallocations.
Therefore, unlike the situation in Hang and Katz where resolution
of the dispute would not affect the original partnership
allocations, resolution of the dispute could affect the
partnership allocations to the other partners. Therefore, the
determination of whether Mr. Blonien was a partner in Finley
Kumble is more appropriately determined at the partnership level.
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