-263-
The Treasury regulation interpreting this section provides:
A court reviewing a notice of final partnership
administrative adjustment has jurisdiction to determine
all partnership items for the taxable year to which the
notice relates and the proper allocation of such items
among the partners. Thus, the review is not limited to
the items adjusted in the notice. [Sec. 301.6226(f)-
1T(a), Temporary Proced. & Admin. Regs., 52 Fed. Reg.
6779-01 (Mar. 5, 1987).185]
On the basis of section 6226(f) and the applicable
regulation, we could construe our jurisdiction over petitioner’s
1997 and 1998 taxable years to encompass SMP’s reporting of its
basis in SMHC stock. Nonetheless, if we were to exercise
jurisdiction over this item, and if we were to decide, as
respondent contends, that SMP’s basis in SMHC is zero, our
decision would result in no real tax adjustments at either the
partnership or partner level for the partnership taxable years at
issue.186 Conceivably, our decision might influence SMP’s
reporting for subsequent taxable years, but beyond this “in
terrorem” effect, it is unclear what impact such a decision would
185 A final regulation under sec. 6226 was promulgated
effective for partnership taxable years beginning on or after
Oct. 4, 2001. Sec. 301.6226(f)-1(c), Proced. & Admin. Regs.
186 Unlike River City Ranches #1 Ltd. v. Commissioner, 401
F.3d 1136 (9th Cir. 2005), affg. in part, revg. in part, and
remanding T.C. Memo. 2003-150, this is not a case where our
findings with respect to this matter are alleged to have any
bearing on penalty-interest under sec. 6621 or on any other
penalties. For instance, respondent has not alleged that an
adjustment to SMP’s reported basis in SMHC stock would give rise
to any underpayment for purposes of sec. 6662 accuracy-related
penalties.
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