- 10 - we retain jurisdiction regardless of whether TEFRA applies. Paragraph 4(g) of the petition assigned error to the adjustment in paragraph 7 of the explanation of items in the notice of deficiency denying petitioners a deduction under section 183 or section 212 for any legal, accounting, consulting, and advisory fees for the taxable year 2001. These items are neither partnership items nor affected items. They were claimed by petitioners on their individual return, not by the partnership on its partnership return. Respondent contends that the items referred to in paragraph 4(g) of petitioners’ petition are affected items. Respondent reasons that the deduction was disallowed because Alameda and the partnership transaction at issue were shams, and that the determination of whether a partnership is a sham is a partnership item. Respondent cites River City Ranches #1 Ltd. v. Commissioner, 401 F.3d 1136, 1144 (9th Cir. 2005), affg. in part and revg. in part T.C. Memo. 2003-150, and Andantech L.L.C. v. Commissioner, 331 F.3d 972, 981 (D.C. Cir. 2003), affg. in part and remanding T.C. Memo. 2002-97, to support his assertion. We find that River City Ranches, which dealt with the penalty-interest provision of section 6621(c), is distinguishable. The issue of whether the partnership’s transactions were shams directly affected the penalty-interest issue. In this case, even if the Court were to determine thatPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 NextLast modified: November 10, 2007