- 19 -
6226(b); Energy Res., Ltd. v. Commissioner, 91 T.C. 913 (1988).8
These TEFRA provisions normally satisfy the requirements of due
process because the tax matters partner, who receives notice and
has the right to petition the Tax Court to reconsider the FPAA,
acts as the agent for the other partners. Kaplan v. United
States, 133 F.3d 469, 475 (7th Cir. 1998); Walthall v. United
States, 131 F.3d 1289, 1295 (9th Cir. 1997). However,
petitioners contend that this agency rationale does not apply to
persons who were not partners in the partnership and did not
otherwise agree to be bound by partnership-level determinations.
Nor, petitioners contend, citing Transpac Drilling Venture 1982-
12 v. Commissioner, 147 F.3d 221, 225 (2d Cir. 1998), revg. and
remanding T.C. Memo. 1994-26, does it apply to situations in
which the TMP has an inherent conflict of interest with the
putative partner on the question at issue, inasmuch as the agency
rationale is based on the notion that partners owe fiduciary
duties (including the duty of loyalty) to each other. See
Meinhard v. Salmon, 164 N.E. 545 (N.Y. 1928).
Whatever the merits of petitioners’ due process challenge,
there are two reasons they have no standing to raise it in this
8It does not appear that partners with less than 1-percent
interests in Finley Kumble banded together to constitute
themselves a 5-percent group entitled, under sec. 6223(b)(2), to
notice of and participation in the administrative proceeding at
the partnership level and, under sec. 6226(b)(1), to file a
petition to the Tax Court in response to the FPAA.
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