17
Additionally, the determination of whether the corporation
before us should be respected for Federal tax purposes has no
impact on the partnerships, their books and records, or any other
aspect of the partnerships. The determination also has no impact
upon the amount or character of a distribution, or percentage of
the other partners’ interests in the partnerships. The
determinations’ sole impact is on the liability for self-
employment tax and related penalties. A determination of the
identity of the partners in GTWP and TWA is not a partnership
item under this section of the regulations.
There are circumstances in which the determination of the
status of a partner is a partnership item. In Blonien v.
Commissioner, 118 T.C. 541 (2002), for example, we held that a
determination that an individual was a partner in a partnership
was a partnership item because such determination affected the
distributive shares of the other partners. See also Oceanic
Leasing v. Commissioner, T.C. Memo. 1996-458. A determination of
this nature is more appropriately made at the partnership level
because it alters the number of partners and decreases the
distributive shares of the other partners. Conversely,
resolution of the issue in this case does not change the number
of partners, their allocable shares, or in any way affect the
partnership or the other partners.
Under the circumstances of this case, we hold that a
determination that the partners of record were not the true and
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