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respect to such adjustment. In conjunction with the foregoing,
we understand petitioner to argue that because respondent failed
to issue a notice of deficiency for the computational adjustment,
the assessment was barred and the additions to tax, inasmuch as
they are determined by reference to the NOL carryforward
adjustments, must likewise fall.
Respondent filed an objection to petitioner's Motion for
Partial Summary Judgment Regarding Penalties Asserted Based On
The Net Operating Loss Carryforwards. In her objection,
respondent asserted that she correctly determined that the NOL
adjustments in issue are affected items subject to computational
adjustment. Respondent contends that such adjustments are not
affected items requiring determinations at the partner level
because respondent proceeded with her computations without
otherwise adjusting petitioner's tax liability as reported. From
respondent's perspective, there simply is no need for a
determination at the partner level regarding the NOL adjustments
that were made in this case.
Discussion
In general, the tax treatment of any partnership item is
determined at the partnership level pursuant to the unified audit
and litigation procedures set forth in sections 6221 through
6231. TEFRA, sec. 402(a), 96 Stat. 648. The TEFRA procedures
apply with respect to all taxable years of a partnership
beginning after September 3, 1982. Sparks v. Commissioner, 87
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