-5-
partnership-level proceedings. Sec. 6225(a); Maxwell v.
Commissioner, supra at 788.
The tax treatment of any “partnership item” is determined at
the partnership level. Sec. 6221. Section 6231(a)(3) defines
“partnership item” as any item required to be taken into account
for the partnership’s taxable year to the extent regulations
prescribed by the Secretary provide that the item is more
appropriately determined at the partnership level than at the
partner level. Saso v. Commissioner, 93 T.C. 730, 732 (1989).
The regulations provide that the partnership aggregate and each
partner’s share of “Items of income, gain, loss, deduction or
credit of the partnership” are “partnership items.” Sec.
301.6231(a)(3)-1(a)(1)(i), Proced. & Admin. Regs. The assessment
of the deficiency in petitioners’ Federal income tax for 1996
resulted from the adjustments respondent made in the FPAA issued
to RPT PRN LLC. At the partnership level this Court’s review of
the Commissioner’s adjustment of partnership items is governed by
section 6226. Maxwell v. Commissioner, supra at 788.
Under section 6231(a)(5) an “affected item” is defined as
“any item to the extent such item is affected by a partnership
item.” Additions to tax under section 6662(a) are analyzed as
“affected items”. Crystal Beach Dev., Ltd. v. Commissioner, T.C.
Memo. 2000-170. It follows that the penalty for petitioners’
taxable year 1996 determined in the notice of deficiency is an
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