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(v) Partnership liabilities (including determinations
with respect to the amount of the liabilities, whether the
liabilities are nonrecourse, and changes from the preceding
taxable year); and
* * * * * * *
(4) Items relating to the following transactions, to
the extent that a determination of such items can be made
from determinations that the partnership is required to make
with respect to an amount, the character of an amount, or
the percentage interest of a partner in the partnership, for
purposes of the partnership books and records or for
purposes of furnishing information to a partner:
(i) Contributions to the partnership;
(ii) Distributions from the partnership; and
(iii) Transactions to which section 707(a) applies
(including the application of section 707(b)).
Sec. 301.6231(a)(3)-1(a), Proced. & Admin. Regs.
All partners who held an interest in the partnership for the
taxable year at issue generally will be treated as parties to a
partnership action. Sec. 6226(c). However, a partner is not a
party if he or she does not have an interest in the outcome of
the proceeding because such partner's partnership items have
become nonpartnership items pursuant to subsection (b) of section
6231. Sec. 6226(d). A partner's partnership items will be
treated as nonpartnership items as of the date on which the
partner enters into a settlement agreement with the respondent
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
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