- 16 -
1996. The notices were issued on March 14, 1997, less than one
year thereafter. Thus, if section 6229 applies, it is beyond
question that the March 14, 1997, notices are timely.
Section 6229 was enacted as part of the unified partnership
audit and litigation provisions of TEFRA sec. 402(a), 96 Stat.
648. The TEFRA rules, codified at sections 6221 through 6233,
segregate adjustments attributable to an individual's interest in
partnerships which are subject to the TEFRA statutes from all
other adjustments which can be made to the individual's return.
Maxwell v. Commissioner, 87 T.C. 783, 787-788 (1986). So-called
TEFRA adjustments generally can be made only after all
partnership proceedings are completed. White v. Commissioner, 95
T.C. 209, 211 (1990); Roberts v. Commissioner, 94 T.C. 853, 859
(1990); N.C.F. Energy Partners v. Commissioner, 89 T.C. 741, 743-
745 (1987); Maxwell v. Commissioner, supra at 790-793.
If we determine that the section 469 issue, as petitioners
contend, does not involve a partnership item or affected item
adjustment, then section 6229 does not operate to suspend the
period of limitations. Sec. 6501. Under this scenario,
respondent concedes that petitioners' distributive share of
petitioners' losses for 1989 and 1990 could not be
recharacterized as passive, and, therefore, that petitioners
would be entitled to refunds for those years based on the
partnership-level adjustments.
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