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was different. As a result of these differences, each
partnership, and then each limited partner, was addressed one at
a time.
Before the individual computations could be done, the IRS
had to determine: (a) How much cash was contributed by each
limited partner; (b) in which tax years the contributions were
made; (c) whether the limited partners received any
distributions; (d) in which tax years any distributions were
made; (e) whether each limited partner contributed cash towards a
“Note Settlement Agreement” in 1987; (f) and how much cash, if
any, was contributed by each limited partner towards the Note
Settlement Agreement in 1987. The answer to each of the six
questions was needed to determine the deficiencies and/or credits
for each of the nearly 1,000 limited partners in the 20 TEFRA
partnerships. After the above was determined, a computation had
to be prepared by an Appeals officer from the Manhattan Appeals
Office before a proposed decision document could be submitted to
the Court.
On October 12, 1993, Lerner sent to “All Swanton TEFRA
Partners” a letter notifying them of the settlement with the IRS
(October 1993 letter). The letter, in part, stated that the IRS
would begin sending decision documents and closing agreements to
the partners within 1 to 2 months after October 1993. The letter
further stated that, within 1 year after the partnership’s
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