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the NOL carryovers constitute “affected items” governed by the
unified audit and litigation procedures and that respondent has
failed to comply with those procedures by not first proceeding
against the relevant partnerships.
1. TEFRA Procedures
The unified audit and litigation procedures were enacted as
part of the Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA), Pub. L. 97-248, sec. 401(a), 96 Stat. 648, and are
commonly referred to as the TEFRA procedures.4 The TEFRA
procedures provide a method for adjusting “partnership items” in
a single, unified partnership proceeding, rather than in separate
actions against each partner. See sec. 6221. In general, the
Commissioner is precluded from assessing a deficiency
attributable to a partnership item until after the completion of
the partnership-level proceeding. See sec. 6225(a). The same
prohibition extends to the assessment of a deficiency
attributable to an “affected item”, as the tax treatment of such
an item is dependent on the treatment of a partnership item.
E.g., Dubin v. Commissioner, 99 T.C. 325, 328 (1992); N.C.F.
Energy Partners v. Commissioner, 89 T.C. 741, 743-744 (1987);
Maxwell v. Commissioner, 87 T.C. 783, 792 (1986). Accordingly, a
notice of deficiency issued prior to the completion of the
4 The TEFRA procedures, effective for partnership taxable
years beginning after Sept. 3, 1982, have been amended since
their enactment and now constitute secs. 6221 through 6234.
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