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provisions were enacted partly in response to the administrative
problems experienced by the Internal Revenue Service in auditing
returns of partnerships, particularly tax shelter partnerships
with numerous partners. Staff of Joint Comm. on Taxation,
General Explanation of the Revenue Provisions of the Tax Equity
and Fiscal Responsibility Act of 1982, at 268 (J. Comm. Print
1982). As we stated in an earlier case interpreting the TEFRA
partnership provisions:
By enacting the partnership and audit litigation
procedures, Congress provided a method for uniformly
adjusting items of partnership income, loss, deduction,
or credit that affect each partner. Congress decided
that no longer would a partner's tax liability be
determined uniquely but "the tax treatment of any
partnership item [would] be determined at the
partnership level." Sec. 6221. [Maxwell v.
Commissioner, 87 T.C. 783, 787 (1986); alteration in
original.]
Section 6221 provides that the tax treatment of partnership
items shall be determined at the partnership level, except as
otherwise provided in subchapter C of chapter 63 of the Code.
Section 6231(a)(3) provides that a "partnership item" means any
item required to be taken into account for the partnership's
taxable year under any provision of subtitle A of the Code to the
extent prescribed by the regulations as an item that "is more
appropriately determined at the partnership level than at the
partner level." Section 6231(a)(4) defines "nonpartnership
items" as those items that are not partnership items.
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