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Discussion
The TEFRA partnership-level procedures prescribed in
sections 6221 through 6234 require that all challenges to
adjustments of partnership items be made in a single unified
proceeding.2 Under these procedures, “the tax treatment of any
partnership item (and the applicability of any penalty, addition
to tax, or additional amount which relates to an adjustment to a
partnership item) shall be determined at the partnership level.”
Sec. 6221. The Commissioner generally must wait until a
partnership-level proceeding is over to assess a liability
attributable to a partnership item. See sec. 6225(a); Maxwell v.
Commissioner, 87 T.C. 783, 788 (1986). The Commissioner
generally must follow the deficiency procedures before assessing
a deficiency relating to a nonpartnership item such as an
affected item. See sec. 6230(a)(2); see also sec. 6231(a)(4)
(defines a “nonpartnership item” as an item which is (or is
treated as) not a partnership item); sec. 6231(a)(5) (defines an
“affected item” as any item to the extent the item is affected by
a partnership item).
The Court’s jurisdiction over a TEFRA partnership-level
proceeding is invoked when the tax matters partner or other
eligible partner timely files a petition with the Court seeking a
2 Unless otherwise indicated, section references are to the
applicable versions of the Internal Revenue Code, and Rule
references are to the Tax Court Rules of Practice and Procedure.
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Last modified: May 25, 2011