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contention, respondent submitted separate schedules setting forth
respondent's computations of the interest due from petitioners
and respondent's application of the payments received from
petitioners as of August 28, 1996. The latter schedule indicates
that, notwithstanding petitioners' payment of $3,240.60 on
February 20, 1996, petitioners still owe interest in the amount
of $3,755.35 for 1986 computed at the normal rate prescribed in
section 6621(a)(2), and $6,106.15 if such interest is computed at
the increased rate prescribed in section 6621(c).3
Discussion
The tax treatment of any partnership item generally is
determined at the partnership level pursuant to the unified audit
and litigation procedures set forth in sections 6221 through
6233. Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA),
Pub. L. 97-248, sec. 402(a), 96 Stat. 648. The TEFRA procedures
3 We note that the schedule setting forth respondent's
application of payments received from petitioners varies slightly
from the description of the application of those payments
contained in respondent's objection to petitioner's Motion to
Restrain Assessment and Collection. In particular, respondent's
objection states that the $976.38 that petitioners paid on July
18, 1991, was applied to offset $958.97 in interest due on the
deficiency of $1,747 entered against petitioners in docket No.
11547-90, with a $17.41 credit being applied against petitioners'
tax liability for 1988. In contrast, the schedule suggests that
the $958.97 amount was applied against the $6,054 in tax assessed
against petitioners as a computational adjustment to reflect the
disallowance of Irving & Co. partnership items. Although it
appears that respondent's objection contains a correct statement
of the application of the payment, we observe that the
discrepancy would not compromise respondent's assertion that
petitioners have not overpaid interest in this case.
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