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For purposes of this case only, for the
petitioner's taxable years 1984 and 1985, respondent
concedes that petitioner is not liable for the addition
to tax under I.R.C. sec. 6659 based upon the
petitioner's income or loss from the December
Associates partnership of $123,071.00 in 1984 and
$14,647.00 in 1985.
In light of this concession, we shall grant petitioner's Motion
for Partial Summary Judgment Regarding The Overvaluation Penalty
and render judgment that petitioner is not liable for the
additions to tax under section 6659 as determined by respondent
in the affected items notices of deficiency for the taxable years
in issue.
In his Motion for Partial Summary Judgment Regarding
Penalties Asserted Based On The Net Operating Loss Carryforwards,
petitioner seeks a ruling that respondent erred in treating
petitioner's 1984 and 1985 NOL carryforwards as affected items
subject to computational adjustment. In petitioner's view,
adjustments to NOL's (whether carryforwards or carrybacks) often
require such a detailed review of the taxpayer's tax returns that
such adjustments should invariably be treated as affected items
that require a factual determination in a partner-level
proceeding. In other words, petitioner requests a "bright-line"
rule that would preclude respondent, following a partnership
level proceeding, from adjusting an NOL item at the partner level
until the NOL adjustment is included in an affected items
deficiency notice and the taxpayer/partner is provided with an
opportunity to invoke this Court's deficiency jurisdiction with
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