8
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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