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the small partnership exception of section 6231(a)(1)(B)(i); and
(2) the parties’ positions regarding the Court’s jurisdiction
over the losses petitioners claimed on their returns and the
deduction petitioners claimed for legal, accounting, consulting,
and advisory fees. In their separate status reports, the parties
responded: (1) One of the partners in Alameda is Clarion Forex,
which is a disregarded entity and therefore disqualifies Alameda
from the small partnership exception; and (2) the Court does not
have jurisdiction over the losses or the deductions petitioners
claimed on their return because those losses flow directly from
partnership items, and since the partnership items had not yet
been determined at the partnership level when respondent issued
the notice of deficiency, this Court does not have jurisdiction
over any of the items in the notice. In addition, petitioners
conceded that they were not allowed a deduction for legal,
accounting, consulting, and advisory fees.
Discussion
Applicability of TEFRA
TEFRA provisions divide disputes arising from “partnership
items” from those arising from “nonpartnership items”. Maxwell
v. Commissioner, 87 T.C. 783, 787 (1986). Section 6231(a)(3)
provides:
(3) Partnership item.--* * * with respect to a
partnership, any item required to be taken into account
for the partnership’s taxable year under any provision
of subtitle A to the extent regulations prescribed by
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Last modified: November 10, 2007