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with respect to such items. Sec. 6231(b)(1)(C). The
classification of items as partnership or nonpartnership items is
significant because the audit and litigation procedures provided
in sections 6221 through 6230 apply to partnership items.
Nonpartnership items are subject to the rules for judicial and
administrative resolution of the partner's tax liability and
cannot be the subject of a partnership proceeding. See, e.g.,
Maxwell v. Commissioner, 87 T.C. 783, 788-789 (1986).
Petitioner has made various arguments based on an assumption
that respondent included partners who have accepted the out-of-
pocket settlement in her calculations on which the proposed
decision documents are based. Petitioner bears the burden of
proof in these cases. Rule 142. We begin by noting that there
is no evidence in the record concerning partners who have
accepted the out-of-pocket settlement. Therefore, we have no
indication that any such partners were included in respondent's
calculations. We will, however, further address petitioner's
arguments.
Petitioner argues that the partnership income, losses,
credits, and liabilities calculated pursuant to the agreement
should be allocated to a limited group of partners. Petitioner
contends that any partners who have accepted the out-of-pocket
settlement offer from respondent are not parties to this
proceeding pursuant to section 6226. Therefore, petitioner
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