Allen Family Foods, Inc. - Page 6




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          governing statutory provisions, set forth in sections 6241-6245,            
          generally provide that the proper tax treatment of S corporation            
          items shall be determined in a single, unified proceeding at the            
          corporate (as opposed to individual shareholder) level.  See                
          Eastern States Cas. Agency, Inc. v. Commissioner, 96 T.C. 773,              
          775 (1991); Dial, Inc. v. Commissioner, 95 T.C. 1, 1-2 (1990).              
          In this regard, section 6245 provides:                                      
               SEC. 6245. * * * the term "subchapter S item" means any                
               item of an S corporation to the extent regulations                     
               prescribed by the Secretary provide that, for purposes                 
               of this subtitle, such item is more appropriately                      
               determined at the corporate level than at the                          
               shareholder level.                                                     
               It is well settled that items requiring factual                        
          determinations at the individual shareholder level; i.e., so-               
          called affected items, are beyond the scope of the Court's                  
          jurisdiction in a corporate level proceeding.  See sec. 6244                
          (making certain procedural provisions of the unified partnership            
          audit and litigation procedures set forth in secs. 6221-6234                
          applicable to S corporations); N.C.F. Energy Partners v.                    
          Commissioner, 89 T.C. 741, 744 (1987); see also Hang v.                     
          Commissioner, 95 T.C. 74 (1990).                                            





               3(...continued)                                                        
          beginning after Dec. 31, 1996, by the Small Business Job                    
          Protection Act of 1996, Pub. L. 104-188, sec. 1307(c)(1), 110               
          Stat. 1781.                                                                 





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