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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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