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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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