Barry and Carolina Gustin - Page 2




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                    Ps filed a motion to dismiss for lack of                          
               jurisdiction.  Ps argue that a notice of deficiency                    
               which adjusts items affected by partnership items is                   
               invalid if it is issued before the completion of                       
               partnership-level proceedings.  R concedes that we lack                
               jurisdiction over the 1998 and 1999 taxable years.  See                
               Maxwell v. Commissioner, 87 T.C. 783 (1986).                           
                    Held:  The Tax Court has jurisdiction to                          
               redetermine the deficiency for 1997.  Partnership-level                
               proceedings were not initiated, a notice of final                      
               partnership administrative adjustment was not issued by                
               R, and the 3-year period of limitations for assessment                 
               under sec. 6229(a), I.R.C., expired.  R acknowledges                   
               that he cannot pursue a deficiency based on                            
               partnership-level adjustments for tax year 1997.  As a                 
               result, the parties must accept the partnership-level                  
               treatment of partnership items.  Roberts v.                            
               Commissioner, 94 T.C. 853 (1990).  However, P-H’s basis                
               in the partnership, while affected by partnership                      
               items, is not itself a partnership item.  See Dial USA,                
               Inc. v. Commissioner, 95 T.C. 1 (1990).                                

               Donald L. Feurzeig, for petitioners.                                   
               G. Michelle Ferreira, for respondent.                                  


                                 MEMORANDUM OPINION                                   

               RUWE, Judge:  The matter before the Court is petitioners’              
          motion to dismiss for lack of jurisdiction under Rule 53.1                  
          Respondent determined deficiencies with respect to petitioners’             
          Federal income taxes for 1997, 1998, and 1999.  Those                       
          deficiencies were based on respondent’s determination that                  


               1Unless otherwise indicated, all section references are to             
          the Internal Revenue Code applicable to the years in issue, and             
          all Rule references are to the Tax Court Rules of Practice and              
          Procedure.                                                                  




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