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under section 704(d). Respondent argues that a partnership-level
proceeding was not required to determine Mr. Gustin’s basis and
to apply the loss limitations. Respondent states that he does
not intend to issue an FPAA, that he can no longer make
adjustments to partnership items for Annona’s 1997 tax year, that
he accepts the partnership’s treatment of partnership items, and
that partnership-level proceedings are completed when he accepts
the partnership’s treatment of partnership items without
adjustment.
The instant case is similar to Roberts v. Commissioner, 94
T.C. 853 (1990). In Roberts, the Commissioner did not commence a
partnership-level examination, did not issue an FPAA, and did not
otherwise seek to adjust the partnership items reported on the
partnerships’ returns. The notice of deficiency was issued on
April 9, 1987, disallowing partnership losses claimed by the
taxpayers because of alleged stop-loss agreements with third
parties. See sec. 465(b)(4). On April 15, 1987, the period of
limitations for assessing a tax attributable to any partnership
item under section 6229(a) expired. On July 6, 1987, the
taxpayers filed their petition and then filed a motion to dismiss
for lack of jurisdiction.
In Roberts v. Commissioner, supra at 861-862, we held that
side agreements for purposes of the section 465 at-risk
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