William R. and Betty O. Bass - Page 12
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published opinion 921 F.2d 280 (9th Cir. 1991); Viehweg v.
Commissioner, 90 T.C. 1248, 1253-1255 (1988).
Third, following up on an inquiry made by the Court to
respondent’s counsel at the time of trial, petitioners assert
that section 7491(c) should impose on respondent the burden of
production with respect to the additions to tax in this case.
That section applies to examinations commenced after July 22,
1998. Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 685, 727.
Respondent contends that the affected items in this case are
merely a continuation of the proceeding commenced with respect to
the partnership long before the effective date of section
7491(c). Under the circumstances of this case, it is arguable
that an examination of petitioners’ return commenced after that
effective date, because, due to petitioners’ failure to attach a
Schedule K-1, the disallowed deductions were determined only
after examining petitioners’ Schedule C. This is not the normal
proceeding in which adjustments based on the partnership
proceeding and Schedules K-1 are automatically made and assessed
with respect to the individual partners. We offer no opinion,
however, about whether the determination of additions to tax as
affected items resulting from a partnership examination is a
separate examination for purposes of the effective date of
section 7491, and we need not decide whether the circumstances of
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