- 18 -
would deprive Mr. Blonien of due process and violate their
constitutional rights. Mr. Blonien observes that he had an
inherent conflict of interest with the Finley Kumble trustee and
Mr. Manley, the TMP, on this question. The trustee had an
interest in enlarging the group of persons against whom claims
for contribution to satisfy the claims of creditors could be
pursued. Mr. Manley, as the partner with the largest percentage
interest in the firm, had an interest in enlarging the group of
persons to whom the COD income would be allocated in order to
reduce his own share of the COD income. Yet, as Mr. Blonien
observes, he had no right to participate in the partnership-level
proceeding to dispute his partner status.7
Under the partnership unified audit and litigation
procedures enacted by the Tax Equity and Fiscal Responsibility
Act of 1982 (TEFRA), Pub. L. 97-248, sec. 402(a), 96 Stat. 648,
codified at sections 6221 through 6233, if a partnership has more
than 100 partners and a putative partner has less than a 1-
percent interest in the profits of the partnership, the
Commissioner generally need not give notice of a partnership
audit or proceeding to the putative partner, and the putative
partner has no standing to challenge the FPAA. Secs. 6223(b),
7If a readjustment petition had been filed in the Tax Court
by the TMP, a notice partner, or a 5-percent group, see infra
note 8, there might have been an interesting question whether Mr.
Blonien should be entitled under sec. 6226(c) to participate in
the proceeding to present his claim that he was not a partner.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011