Alan H. Ginsburg and Estate of Harriet F. Ginsburg, Deceased, Alan H. Ginsburg, Personal Representative - Page 9

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               A.   Partnership Level                                                 
               Respondent concedes that UK Lotto is a partnership within              
          the meaning of section 6231(a)(1).  Respondent did not issue                
          notices of final partnership administrative adjustment (FPAAs)              
          with respect to UK Lotto for 1995.  The loss attributable to                
          Pascal & Co. is a partnership item at the TEFRA-entity level.               
          See sec. 6231(a)(3); sec. 301.6231(a)(3)-1(a)(1)(i), Proced. &              
          Admin. Regs.  The limitations period for issuing FPAAs pertaining           
          to UK Lotto’s 1995 return expired on December 31, 2003, pursuant            
          to the last Form 872-P executed on behalf of UK Lotto and                   
          respondent for the taxable year 1995.  See sec. 6229(a) and                 
          (b)(1).  Consequently, the tax treatment of all partnership items           
          with respect to UK Lotto is final.  See Roberts v. Commissioner,            
          94 T.C. 853, 857 (1990).  There can be no partnership proceedings           
          to adjust or modify the partnership items as reported on the UK             
          Lotto return.  In addition, respondent through his letter in                
          April 2003 conceded administratively that the loss attributable             
          to Pascal & Co. is allowable at the UK Lotto partnership level.             
               B.   S Corporation Level                                               
               NASM and FAP are not TEFRA entities.  They each reported 50            
          percent of the loss from UK Lotto.  NASM and FAP are “pass-thru”            
          partners under section 6231(a)(9).  Section 6231(a)(9) provides             
          that a “‘pass-thru partner’ means a partnership, estate, trust, S           
          corporation, nominee, or other similar person through whom other            

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