Barry and Carolina Gustin - Page 13




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          1997 partnership return is final and binding on both respondent             
          and petitioners.  However, that does not present itself as a                
          jurisdictional issue where, as here, the only adjustments stated            
          are to affected items.6                                                     
               We hold that the notice of deficiency based on affected                
          items is valid where an administrative partnership-level                    
          proceeding has not been initiated and respondent is bound by the            
          partnership’s treatment of partnership items.  We hold that we              
          have jurisdiction to redetermine the deficiency for petitioners’            
          1997 tax year.                                                              

                                                       An appropriate order           
                                                  will be issued.                     







               6Petitioners contend that the determination of basis will              
          require an examination of Annona’s books and records and that               
          this involves a determination of partnership items, which                   
          requires partnership-level proceedings.  We rejected the same               
          argument in Roberts v. Commissioner, 94 T.C. at 862, stating:               
               Nothing in the TEFRA partnership provisions indicates                  
               that we cannot analyze documents and records at the                    
               partnership level in a deficiency proceeding.  We lack                 
               jurisdiction only to redetermine partnership items that                
               the partnership was required to take into account at                   
               the partnership level.  Sec. 6231(a)(3).  In the                       
               absence of a partnership proceeding, those matters are                 
               considered final at the partnership level. * * *                       
               [Emphasis added; fn. ref. omitted.]                                    





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