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Commissioner, 91 T.C. 110, 128 (1988), affd. without published
opinion 886 F.2d 442 (D.C. Cir. 1989).
In the cases before the Court, the Commissioner exercised
her discretion by providing that the regulations defining
"partnership items" would be effective for partnership taxable
years ending after September 3, 1982, coinciding with the
effective date of TEFRA.
In general, the retroactive application of an income tax
regulation has been reviewed for abuse of discretion. Automobile
Club of Michigan v. Commissioner, 353 U.S. 180, 184 (1957);
Wendland v. Commissioner, 739 F.2d 580, 581 (11th Cir. 1984),
affg. 79 T.C. 355 (1982); Redhouse v. Commissioner, 728 F.2d
1249, 1251 (9th Cir. 1984), affg. Wendland v. Commissioner, 79
T.C. 355 (1982). However, we do not find that the Treasury
committed an abuse of discretion with respect to the effective
date of the regulations in question here.
Petitioner's reliance on Eastern States Casualty Agency v.
Commissioner, 96 T.C. 773 (1991), is misplaced. In that case the
Commissioner issued a final S corporation administrative
adjustment (FSAA) to the tax matters person of Eastern States for
the taxable year 1984. Eastern States had only 4 shareholders
and contended that the FSAA procedure did not apply because the
Commissioner had issued section 301.6241-1T(c)(2)(i), Temporary
Proced. & Admin Regs., 52 Fed. Reg. 3003 (January 30, 1987),
which provided that a corporation with five or fewer shareholders
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