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partnership’s information return--as being part of the taxpayer
partner’s tax return.
Thus, we conclude that petitioners are correct in their
contention that 2d-tier partnerships’ information returns are to
be taken into account in determining, for purposes of section
6501(e)(1)(A), the amount of gross income stated in the
taxpayer’s tax return.
VI. Other Considerations
Both sides rely on section 702(c) and section 1.702-1(c)(2),
Income Tax Regs. Respondent asserts that “The plain language of
the Code and the regulations requires” consideration of only the
1st-tier partnerships’ information returns. Petitioners assert
that “Therefore, under this explicit statutory rule [sec.
702(c)], * * * respondent must necessarily” take account of the
2d-tier partnerships’ gross income. The short answer is that the
texts of both section 702(c) and section 1.702-1(c)(2), Income
Tax Regs., are silent on the matter of 2d-tier partnerships. The
little legislative history we have found regarding section 702(c)
also is silent on this matter. We have not found any indication
that the Congress was aware of the question when it considered
and crafted section 702(c), or that the Treasury Department was
aware of the question when it issued the regulation. Indeed, it
may be argued that the statutory language (“determine the gross
income of a partner”) may apply to the numerator of the 25-
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