- 5 -
requires a consideration of the unified audit and litigation
procedures enacted as part of the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, 96 Stat. 324.
The TEFRA partnership provisions were enacted in response to
the administrative problems experienced by the Internal Revenue
Service in auditing returns of partnerships, particularly tax
shelter partnerships with numerous partners. Staff of Joint
Comm. on Taxation, General Explanation of the Revenue Provisions
of the Tax Equity and Fiscal Responsibility Act of 1982, at 268
(J. Comm. Print 1982). As we stated in an earlier case
interpreting the TEFRA partnership provisions:
By enacting the partnership and audit litigation
procedures, Congress provided a method for uniformly
adjusting items of partnership income, loss, deduction,
or credit that affect each partner. Congress decided
that no longer would a partner's tax liability be
determined uniquely but "the tax treatment of any
partnership item [would] be determined at the
partnership level." Sec. 6221. [Maxwell v.
Commissioner, 87 T.C. 783, 787 (1986).]
A "partnership item" is defined as an item that is more
appropriately determined at the partnership level than at the
partner level. Sec. 6231(a)(3). Partnership items include each
partner's proportionate share of a partnership's aggregate items
of income, gain, loss, deduction, or credit. Sec. 6231(a)(3);
sec. 301.6231(a)(3)-1(a)(1)(i), Proced. & Admin. Regs. The
treatment of partnership items is decided at the partnership
level, rather than in separate proceedings involving individual
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011