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proceeding is pending. Id. at 528; Maxwell v. Commissioner,
supra at 788.
The notice of deficiency was issued 11 days after the FPAA;
therefore the partnership proceeding was still pending. See sec.
6226(b). We must therefore decide whether any of the items
giving rise to any part of the deficiencies in this case are
partnership items or affected items.
The parties are in agreement that all of the items for 1999
are either partnership items or affected items. We agree. As a
result, we do not have jurisdiction over those items because the
partnership proceeding was pending when the notice of deficiency
was issued. See Maxwell v. Commissioner, supra at 788.
For 2000, the parties are not in agreement as to the
characterization of all of the items. Respondent argues that the
claim on petitioners’ return for that year to an itemized
deduction of $525,000 for legal, accounting, consulting, and
advisory fees related to Stone Canyon is an affected item because
the partnership was a sham. Although the partnership did not pay
the fee, respondent argues that the deduction is nevertheless an
affected item because the disallowance is dependent on the
partnership’s being a sham. In Goldberg v. Commissioner, T.C.
Memo. 2007-81, we held that such fees were neither a partnership
item nor an affected item, and therefore we retained jurisdiction
over them. The deduction was not claimed on the partnership
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