First Blood Associates, Richard M. Greenberg, Tax Matters Partner, et al. - Page 13

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          because a joint return was filed.8  Cf. Estate of Callaway v.               
          Commissioner, T.C. Memo. 1998-99.                                           
               In addition, we note that the policy behind the bankruptcy             
          rule is inapplicable to Mrs. Scarfia's situation.  The purpose              
          for the bankruptcy rule is to prevent the automatic stay of 11              
          U.S.C. section 362(a)(8) (1988), from impeding the TEFRA                    
          proceeding.  See Computer Programs Lambda, Ltd. v. Commissioner,            
          89 T.C. at 203.  Title 11 U.S.C. section 362(a)(8) (1988),                  
          generally provides that the filing of a bankruptcy petition                 
          operates as a stay of the commencement or continuation of a                 
          proceeding before the Tax Court concerning the debtor.  See Kieu            
          v. Commissioner, 105 T.C. 387, 391 (1995).  Since other partners            
          are unaffected by the resolution of a debtor-partner's bankruptcy           
          proceeding, the TEFRA proceeding should not be delayed pending              
          the outcome of a single partner's bankruptcy proceeding.  Mrs.              
          Scarfia is not a debtor in a bankruptcy proceeding.                         
          Consequently, there is no concern about an automatic stay, and              


               8                                                                      
                    Indeed, the relevant regulatory provisions utilize                
          similar language in their treatment of a partner with a direct              
          interest (e.g., through community property) and an indirect                 
          interest (through filing of a joint return).  Compare sec.                  
          301.6231(a)(12)-1T(a), Temporary Proced. & Admin. Regs., supra              
          ("Thus, both spouses are permitted to participate in                        
          administrative and judicial proceedings.") with sec.                        
          301.6231(a)(2)-1T(a)(1), Temporary Proced. & Admin. Regs., 52               
          Fed. Reg. 6790 (Mar. 5, 1987) ("Thus, the spouse who files a                
          joint return with a partner will be permitted to participate in             
          administrative and judicial proceedings.").                                 




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