- 12 -
partnership proceeding rather than in separate proceedings with
the partners.” Id. at 600, 1982-2 C.B. at 662. Thus, section
6221 provides for the determination of all partnership items at
the partnership level rather than at the partner level.12 Like
subchapter K, however, the TEFRA partnership provisions blend the
entity and aggregate theories. For example, if a partner enters
into a settlement agreement with the Commissioner with respect to
all partnership items for a partnership year, they become
nonpartnership items with respect to that partner and further
partnership-level proceedings are of no consequence to that
partner. See sec. 6231(b)(1)(C). Because the TEFRA partnership
provisions blend the two theories, subtitle F (with respect to
partnerships), like subchapter K, is distressingly complex and
confusing.
The TEFRA partnership provisions that we are required to
interpret in this case are those referring to the period of
limitations for assessing tax. In interpreting these provisions,
we must keep in mind the Supreme Court’s admonition that
“Statutes of limitation sought to be applied to bar rights of the
Government, must receive a strict construction in favor of the
Government.” E.I. Dupont De Nemours & Co. v. Davis, 264 U.S.
12A “partnership item” is any item required to be taken into
account for the partnership’s taxable year to the extent
regulations provide that such item is more appropriately
determined at the partnership level rather than at the partner
level. See sec. 6231(a)(3).
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