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the Commissioner had not abused his discretion by failing to
terminate a TMP’s status.
The taxpayer has the burden of proof when alleging an abuse
of discretion. See Capitol Fed. Sav. & Loan Association v.
Commissioner, 96 T.C. 204, 210 (1991).
The parties have stipulated that the IRS has no formal
criteria to determine when, or whether, a written notice
notifying a partner that his partnership items will be treated as
nonpartnership items is to be sent to a taxpayer who is the
subject of a criminal tax investigation. The IRS makes each
determination upon the particular facts of each case.
As previously indicated, the Transpac decision involved
distinguishable facts, and petitioners have not alleged the facts
that the Court of Appeals for the Second Circuit found so
disquieting. Here, petitioners are unable to show that
respondent's actions in continuing to recognize Mr. Hoyt as TMP
were unlawful or arbitrary. Accordingly, we find that
petitioners have not established that respondent abused his
discretion by not notifying Mr. Hoyt that his partnership items
would be treated as nonpartnership items pursuant to section
301.6231(c)-5T, Temporary Proced. & Admin. Regs., supra.
8. Expiration of Period of Limitations With Regard to TBS J.V.
As a supplemental matter, we address the parties’
contentions regarding TBS J.V.’s 1989 and 1990 taxable years.
Respondent contends that TBS J.V. failed to file partnership
returns for both the 1989 and 1990 taxable years and that
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