Richard K. and Marilyn J. Phillips - Page 23




                                       - 23 -                                         
               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.                                                                  








Page:  Previous  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  Next

Last modified: May 25, 2011