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1986 deficiencies and concomitant interest accrual, though, was
occasioned by the promotion of the partnership interests as co-
ownership interests and was not manifestly attributable to
administrative nonfeasance.
The initial partnership action was not amenable to the
jurisdiction of this Court due to respondent’s inadvertent
noncompliance with the TEFRA procedures, Alhouse v. Commissioner,
T.C. Memo. 1991-652, which would not have occurred had the
Partnership been properly characterized as such. The
unsuccessful appeal of that case by the taxpayers involved and
decided by the Court of Appeals for the Ninth Circuit, prolonged
its duration by close to 2 years. The eventual issuance of the
FPAAs was deferred for an additional two plus years because
respondent elected to pursue settlement agreements with some but
not all individual partners. Respondent’s strategic decision to
induce settlements with certain individual members of the
investment group, however, is a matter wholly within his
discretion and does not constitute a ministerial act,
particularly since the TMP and remaining partners were not
readily identifiable. Dadian v. Commissioner, T.C. Memo. 2004-
121.
Additionally, the TEFRA action might have been settled more
expeditiously than the four plus years it took to conclude, but
for the reluctance of the participating partners in that case to
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