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DII. P claimed that the loss offset a $5,831,772
capital gain that P realized during the year. In an
FPAA pertaining to DIP, R determined that the basis of
the stock distributed by DIP was zero and that
accuracy-related penalties under sec. 6662, I.R.C.,
applied. When no petition was filed as to the FPAA, R
did not assess any tax or accuracy-related penalty as
to DII’s sale of the stock. Instead, R issued an
affected items notice of deficiency to Ps as a
predicate to assessing those amounts. Ps now move the
Court to dismiss this case for lack of jurisdiction,
asserting that the deficiency procedures of subch. B of
ch. 63, I.R.C. (deficiency procedures), do not apply to
R’s disallowance of the passthrough loss or to R’s
determination of the accuracy-related penalties.
Held: Sec. 6230(a)(2)(A)(i), I.R.C., makes the
deficiency procedures applicable to R’s disallowance of
the passthrough loss from DII.
Held, further, R’s determination of the
accuracy-related penalties is not subject to the
deficiency procedures by virtue of the parenthetical
text added to sec. 6230(a)(2)(A)(i), I.R.C., by the
Taxpayer Relief Act of 1997, Pub. L. 105-34, sec.
1238(b)(2), 111 Stat. 1026.
David D. Aughtry, Eric M. Nemeth, and Paul L.B. McKenney,
for petitioners.
Meso T. Hammoud, for respondent.
OPINION
LARO, Judge: This is a Son-of-BOSS case that is currently
before the Court on petitioners’ motion to dismiss for lack of
jurisdiction. See generally Kligfeld Holdings v. Commissioner,
128 T.C. 192 (2007), and Notice 2000-44, 2000-2 C.B. 255, for a
general description of Son-of-BOSS cases. Petitioners petitioned
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