Michael V. Domulewicz and Mary Ann Domulewicz - Page 20




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          partnership return appear on petitioners’ 1999 Federal income tax           
          return.  We also observe that DIP’s 1999 partnership return does            
          not reference or identify DII and that DII’s 1999 tax return does           
          not indicate that the INVI stock that was the subject of the                
          reported sale was received in a distribution from DIP.  We                  
          conclude that we have jurisdiction over the deficiency determined           
          in the affected items notice of deficiency.                                 
               We now decide whether we have jurisdiction to decide the               
          issue concerning the accuracy-related penalties.  When no                   
          petition was filed timely as to the FPAA, respondent assessed               
          only that portion of the accuracy-related penalties attributable            
          to the disallowance in the FPAA of DIP’s deductions of the short-           
          term capital loss and interest expense.  Respondent now concedes            
          that the accuracy-related penalties determined in the affected              
          items notice of deficiency should be dismissed for lack of                  
          jurisdiction.  Petitioners concur with this concession.  So do              
          we.                                                                         
               The applicability of any penalty, addition to tax, or                  
          additional amount relating to an adjustment to a partnership item           
          (collectively, partnership item penalties) is generally                     
          determined at the partnership level and assessed on the basis of            
          partnership-level determinations.  See sec. 6221; see also sec.             


               14(...continued)                                                       
          2000, and filed on or before Oct. 30, 2000.                                 






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