-2-
Brad S. Ostroff and Martha Combellick Patrick (specially
recognized), for petitioner.
Anne W. Durning, for respondent.
MEMORANDUM OPINION
LARO, Judge: This case is a partnership-level proceeding
subject to the unified audit and litigation procedures of the Tax
Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L.
97-248, sec. 401, 96 Stat. 628. Smith-Olsen, PLC (Smith/Olsen),
the tax matters partner of Olsen-Smith, LTD (LTD), petitioned the
Court to readjust partnership items relating to a Notice of Final
Partnership Administrative Adjustment (FPAA) issued by the
Commissioner as to LTD’s 1999 taxable year. LTD is a general
partnership the partners of which are three passthrough entities
known as limited liability companies (LLCs). In relevant part,
the FPAA determined that LTD’s net earnings from self-employment
(NESE) totaled $696,807, instead of $627,736 as reported, on
account of a $69,071 increase that the Commissioner made to LTD’s
ordinary income.
Following concessions, we must decide whether we have
jurisdiction to decide the single substantive issue remaining in
dispute. Specifically, petitioner in an amendment to petition
alleged that LTD had no NESE because neither LTD nor any of its
partners had a partner or member who was an individual.
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