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Courts have repeatedly held that the normal deficiency
procedures, including the notice of deficiency, do not apply to
the allocation of partnership items among partners. Randell v.
United States, 64 F.3d 101, 107 (2d Cir. 1995); Pack v. United
States, 992 F.2d 955, 957-958 (9th Cir. 1993); Harris v.
Commissioner, 99 T.C. 121, 125 (1992), affd. 16 F.3d 75 (5th Cir.
1994); Sente Inv. Club Partnership v. Commissioner, 95 T.C. 243,
249 (1990). Despite this long line of cases, petitioners argue
that a notice of deficiency is required because the partnership
provisions do not vest respondent with authority to assess
partnership items against the partners upon the conclusion of a
partnership proceeding. Thus, respondent must rely on section
6201 for that authority. Petitioners reason that since section
6201(d) refers to the deficiency procedures of subchapter B,
respondent must comply with that subchapter for all assessments,
including assessments attributable to partnership items.
Section 6230(a)(1) provides that, in general, the deficiency
notice procedures do not apply to the assessment of computational
adjustments. A "computational adjustment" is
"the change in the tax liability of a partner which
properly reflects the [tax] treatment * * * of a
partnership item". Sec. 6231(a)(6). In short, a
computational adjustment reflects the amount of change
in the tax liability of a partner that is assessed
after a FPAA proceeding becomes final * * *
Palmer v. Commissioner, T.C. Memo. 1992-352, affd. without
published opinion 4 F.3d 1000 (11th Cir. 1993). However,
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