Homer N. Cummings - Page 8

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          affected items that require factual determinations at the partner           
          level.  N.C.F. Energy Partners v. Commissioner, supra at 745.               
               Petitioner relies on 3 cases to support his position that an           
          NOL adjustment is an affected item that requires a determination            
          at the partner level: Harris v. Commissioner, 99 T.C. 121 (1992),           
          affd. 16 F.3d 75 (5th Cir. 1994); Maxwell v. Commissioner, 87               
          T.C. 783 (1986); and Durrett v. Commissioner, T.C. Memo. 1994-              
          179, affd. in part, revd. in part 71 F.3d 515 (5th Cir. 1996).              
          In contrast, respondent relies on Bob Hamric Chevrolet, Inc. v.             
          United States, 849 F. Supp. 500 (W.D. Tex. 1994), to support her            
          position that an NOL adjustment is properly treated as an                   
          affected item subject to computational adjustment.  Based on our            
          view of the cases cited by the parties, and in light of the                 
          circumstances presented, we agree with respondent that the NOL              
          adjustments in question are properly treated as computational               
          adjustments that may be assessed without the issuance of an                 
          affected items notice of deficiency.                                        
               In Maxwell v. Commissioner, supra at 790-791, we                       
          characterized an investment tax credit (ITC) carryback as an                
          affected item on the ground that the existence or amount of the             
          carryback is dependent on or affected by a partnership item;                
          i.e., the amount of the partnership's ITC.  Given the procedural            
          posture of that case, however, we were not required to (and did             
          not) decide whether the ITC carryback was an affected item                  
          subject to a computational adjustment or an affected item                   




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