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discretion under section 6330 in refusing to compromise the
remainder.
Background
Petitioners filed joint returns for the tax years 1983 and
1984. For 1983, they claimed a Schedule E loss of $30,767
attributable to their interest in a partnership named Jackson &
Associates (Jackson). For 1984, they claimed Schedule E losses
of $2,749 attributable to their interest in Jackson and $28,996
attributable to their interest in another partnership, Smith &
Asher Associates (Smith/Asher). Both Jackson and Smith/Asher
were partners in other partnerships: Jackson in a partnership
called Wilshire West Associates (Wilshire), and Smith/Asher in a
partnership called Redwood Associates (Redwood). All these
partnerships were subject to the TEFRA provisions of sections
6221-6234.1
These partnerships were all affiliated with a group of tax
shelters known as the Swanton Coal Programs, a coal mining
venture which produced much more litigation than coal. See,
e.g., Smith v. Commissioner, 92 T.C. 1349 (1989); Beagles v.
1 Section references are to the Internal Revenue Code of
1986, as amended. Secs. 6221 to 6234 were added by the Tax
Equity and Fiscal Responsibility Act (TEFRA) of 1982, Pub. L. 97-
248, sec. 402(a) 96 Stat. 648, and provide for the determination
of partnership items at the partnership, rather than at the
individual partner, level. The Commissioner is generally unable
to assess a deficiency relating to a TEFRA partnership item until
after the completion of partnership-level proceedings. See
generally Katz v. Commissioner, 116 T.C. 5, 8 (2001), revd. on
other grounds 335 F.3d 1121 (10th Cir. 2003).
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