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The regulations promulgated by the Secretary are not
manifestly contrary to the statute as Miller suggests.
Rather, the Secretary enacted Temporary Treasury Regulation
Section 301.6231(c)-5T to carry out the provisions of 26
U.S.C. section 6231(c)(2) and its purpose.
Hoyt's authority as the designated TMP could not be
terminated based on the criminal investigation until he
received written notification from the IRS of the conversion
of items to nonpartnership. In summary, it is both the
regulations and the Internal Revenue Code which provides
that the TMP designation shall be terminated upon the
criminal investigation and the written notification that
partnership items shall be treated as nonpartnership items.
Therefore, we hold that the TMP had authority to enter into
consents with the IRS to extend the time for assessments and
bind Miller to the extensions. [Fn. ref. omitted.]
We conclude that the Secretary's regulatory treatment of the
partnership items of partners under criminal tax investigation
comports with the language of section 6231(c) and hold section
301.6231(c)-5T, Temporary Proced. & Admin. Regs., supra, is a
valid regulation. In this case the record clearly reflects that
the IRS did not notify Mr. Hoyt that his partnership items would
be treated as nonpartnership items. Pursuant to the provisions
of section 301.6231(c)-5T, Temporary Proced. & Admin. Regs.,
supra, the commencement of a criminal tax investigation of a
partner in a TEFRA partnership does not necessarily or
immediately interfere with the effective and efficient
enforcement of the internal revenue laws and require the
treatment of partnership items as nonpartnership items in every
situation.
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