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In the instant case, an FPAA was not issued and partnership-
level proceedings were not initiated. Respondent has not
proposed any adjustments to partnership items and agrees that he
is bound by the partnership’s determinations of partnership
items. Under those circumstances, the outcome at the partnership
level is acceptance of the partnership’s treatment of its
partnership items, and a notice of deficiency regarding affected
items can be the basis for our jurisdiction. See Roberts v.
Commissioner, 94 T.C. 853 (1990).
The seminal case in this area is Maxwell v. Commissioner, 87
T.C. 783 (1986). In Maxwell, the potential for a duplication of
procedures prompted this Court to limit our jurisdiction over the
deficiencies relating to affected items: “Affected items depend
on partnership level determinations, cannot be tried as part of
the personal tax case, and must await the outcome of the
partnership proceeding.” Id. at 792. We have previously
considered this language and have appropriately declined to
afford it an interpretation that is broader than what was
required for the disposition of the jurisdictional issue in that
case:
Petitioners rely on our statement in Maxwell that
“Affected items depend on partnership level
determinations, [and] cannot be tried as part of the
personal tax case, and must await the outcome of a
partnership proceeding.” Maxwell v. Commissioner,
supra at 792. Petitioners have taken that statement
out of context. In Maxwell, respondent had determined
deficiencies and additions to tax by disallowing
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