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Hatchery and Foods petitions.
B. Accuracy-Related Penalty
Respondent has also moved to dismiss for lack of
jurisdiction and to strike all allegations in the Hatchery
petition that pertain to the accuracy-related penalties.
Petitioner contends that the accuracy-related penalties
constitute subchapter S items inasmuch as many of the elements
necessary to sustain the penalties require the development of
facts that are within the exclusive knowledge of the corporations
and their officers.
Section 6244 provides in pertinent part that the provisions
of subchapter C that relate to assessing deficiencies with
respect to partnership items and judicial determination of
partnership items are, except as provided in regulations, made
applicable to subchapter S items. Accordingly, we look to the
partnership provisions and case law for guidance in deciding
whether the accuracy-related penalty is a subchapter S item.
In the partnership context, there is a well-settled
distinction between partnership items and affected items. An
affected item is one that is dependent on factual determinations
to be made at the individual partner level. See N.C.F. Energy
Partners v. Commissioner, 89 T.C. 741, 744 (1989). Section
6230(a)(2)(A)(i) provides that the normal deficiency procedures
apply to those affected items that require partner level
determinations. Traditionally, additions to tax were considered
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