William R. and Betty O. Bass - Page 13

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          this case would lead to the conclusion that examination of                  
          petitioners’ Schedule C was a separate examination.  The record             
          in this case supports the application of the additions to tax               
          without regard to the burden of production.  If the burden of               
          production were on respondent, it would be satisfied in this case           
          by the tax return, petitioner’s testimony, and other evidence in            
          the record.                                                                 
               Petitioners also ask that we reduce the amount of tax that             
          was assessed after the partnership-level proceedings became                 
          final, which is not a part of the determination in the statutory            
          notice in this case.  That assessment was a computational                   
          adjustment that the Commissioner is permitted to assess against             
          the partner without issuing a notice of deficiency.  Secs. 6225,            
          6230(a)(1); N.C.F. Energy Partners v. Commissioner, 89 T.C. 741,            
          744 (1987); Maxwell v. Commissioner, 87 T.C. 783, 792 n.7 (1986).           
          We have no jurisdiction in this case over that computational                
          adjustment.  For purposes of the additions to tax, however, we              
          are satisfied by the evidence in this case that the correct                 
          amount of the underpayment is less than the amount assessed and             
          that the correct amount should be used in computing the additions           
          to tax.  That amount will be computed by determining the tax                
          based on disallowance of the sum of $13,150.                                
               Finally, petitioners assert that the investment in Cal-Neva            
          was not a “tax-motivated transaction” for purposes of section               

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