Estate of James T. Callaway, Deceased, Elizabeth N. Callaway, Executrix, and Elizabeth N. Callaway - Page 8

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          in sections 6221 through 6233.  Tax Equity & Fiscal                         
          Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, sec. 402(a),            
          96 Stat. 648.  Pursuant to the TEFRA provisions, which apply with           
          respect to all taxable years of a partnership beginning after               
          September 3, 1982, the tax treatment of any partnership item                
          generally is determined in a single proceeding at the partnership           
          level.  Sparks v. Commissioner, 87 T.C. 1279, 1284 (1986);                  
          Maxwell v. Commissioner, 87 T.C. 783, 789 (1986).                           
          Partnership items include each partner's proportionate share                
          of the 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.                                          
          Partnership items are distinguished from affected items                     
          which are defined in section 6231(a)(5) as any item to the extent           
          such item is affected by a partnership item.  White v.                      
          Commissioner, 95 T.C. 209, 211 (1990).  The first type of                   
          affected item is a computational adjustment made to record the              
          change in a partner's tax liability resulting from the proper               
          treatment of partnership items.  Sec. 6231(a)(6); White v.                  
          Commissioner, supra.  Once partnership level proceedings are                
          completed, the Commissioner is permitted to assess a                        
          computational adjustment against a partner without issuing a                
          deficiency notice.  Sec. 6230(a)(1); N.C.F. Energy Partners v.              

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