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deficiency procedures following the completion of the
partnership-level proceeding.
House Bill
The House bill provides that the partnership-level
proceeding is to include a determination of the
applicability of penalties at the partnership level.
However, the provision allows partners to raise any
partner-level defenses in a refund forum.
Effective date--The provision is effective for
partnership taxable years ending after the date of
enactment.
The Taxpayer Relief Act of 1997 was signed into law on August 5,
1997.
In sum, additions to tax for negligence traditionally have
been treated as affected items that may be redetermined only in a
partner-level proceeding. However, based on changes to the TEFRA
partnership provisions enacted as part of the Taxpayer Relief Act
of 1997, accuracy-related penalties for negligence will be
determined in partnership-level proceedings effective for
partnership taxable years ending after August 5, 1997.
Consistent with the preceding discussion, it follows that
the Court lacks jurisdiction to review the applicability of the
accuracy-related penalty for the taxable years 1995 and 1996 that
petitioner has attempted to place in dispute in this case. In so
holding, we reject petitioner's contention that the amendments to
the TEFRA provisions enacted by the Taxpayer Relief Act of 1997
were intended to clarify existing law. The legislative history
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