John W. and Vincentia Schwartz - Page 8

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          1993), the taxpayers moved to dismiss for lack of jurisdiction on                  
          the ground that the Commissioner failed to comply with the TEFRA                   
          provisions of section 6223(a).  The Commissioner argued that the                   
          partnership at issue was a small partnership within the meaning                    
          of section 6231(a)(1)(B), and, therefore, the TEFRA provisions do                  
          not apply.  As in the instant case, the dispute centered on the                    
          same share requirement.  The partnership reported only two items                   
          on its return for the year at issue; ordinary loss and net loss                    
          from self-employment.  Because the losses were allocated                           
          according to the loss sharing distribution set forth on the                        
          Schedules K-1, we held that the same share requirement was                         
          satisfied.                                                                         
                The taxpayers in McKnight v. Commissioner, supra, later                      
          filed motions to vacate and for reconsideration of our opinion,                    
          arguing the validity of the same share regulation in that it                       
          conflicts with the intent of Congress in enacting section                          
          6231(a)(1).  The taxpayers contended that Congress' intent with                    
          regard to the same share rule under section 6231(a)(1)(B)(i)(II)                   
          was to include in the determination all partnership items defined                  
          in section 301.6231(a)(3)-1(a)(1), Proced. & Admin. Regs, and not                  
          to narrow its scope by application of the same share regulation                    
          of section 301.6231(a)(1)-1T(a)(3), Temporary Proced. & Admin.                     
          Regs., supra.                                                                      
                After reviewing the relevant statues and regulations, and                    
          the legislative history of the same, we observed that:                             




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